End of Year Tax Planning for 2017
J Nick Leitch
November 20, 2017
There is still time to make moves to reduce your 2017 tax bill, but the final curtain is quickly closing. There is much debate over potential health care legislation and tax reform in Washington, DC, but major changes have yet to occur. This means any tax reform is likely to take center stage in 2018. Until then consider the following strategies:
· Defer Taxable Income – This method works best for business owners and not well for employees. Discuss this strategy with our staff.
· Accelerate Deductions – Itemized deductions can be shifted to the current years and so can business deductions. For example, you can make your January mortgage payment at the end of December or write a check to your favorite charity in December. Business owners can prepay for certain expenses in December getting additional expenses on their 2017 tax return.
· Contribute to Retirement Plans – Contributions to a 401(K) are a great method of reducing taxable income. This works well for employees and business owners.
· Harvest Investment Losses – Consider working with your investment advisor on tax-loss harvesting (investment losses can be offset with capital gains). This is a great tool to manage your tax bill.
· Manage your Retirement Withdrawals – Retirees can manage your income from your retirement accounts to assure proper withholdings is complete and can consider deferring income to the following year (accept those under RMDs).
You can schedule an appointment at our office to discuss your individual situation and develop a customized plan.