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2016 Year End Tax Planning Ideas

Posted On: March 31, 2017   Categorized In:   401K, IRA, Taxes
  1. Postpone income and accelerate deductions if future tax rate is expected to be lower. Examples include paying property tax in December versus January, selling loss generating assets and making charitable contributions to accelerate deductions. Examples of postponing income include deferring IRA or 401K distributions.
  2. Accelerate income and postpone deductions if future tax rate is projected to be higher. This can be accomplished by accelerating planned IRA or 401K distributions and selling gain generating investments and deferring deductions by delaying depreciable asset purchases.
  3. Project 2016 tax estimated tax and pay any required estimated tax by January 16, 2017 to avoid underpayment of tax penalties.
  4. Consider making IRA or 401K retirement plan contributions.
  5. Save tax on appreciated stocked while helping college kids financially by gifting appreciated stock to them.