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Year-End Tax Planning Tips

Posted by Admin Posted on Dec 19 2016
  1. Max Your IRA.  You can put in $5,500 ($6,500 if 50+) per year if you are not covered by a retirement plan and you have enough earned income.  If you are covered by a retirement plan limitations may apply depending on your income.
  3. Consider Selling Stocks That Have Lost Value.  If you have capital gains this year you may want to sell stocks that have lost value to offset the gains.  Losses can offset the gains plus $3,000 with the remainder carried forward.
  5. Take Advantage of the Standard Deduction.  If your deductions are close to the standard deduction then try to move them into one year to get above it and then take the standard deduction the next year.  You can prepay your charitable donations and your state income tax.  Prepaying your state income tax may not help if the alternative minimum tax (AMT) applies.  The goal is to have no deductions in the standard deduction year.
  7. Take Minimum Retirement Distributions.  If you are over 70 1/2 years old make sure you take the required minimum distributions out of your IRA’s and retirement plans each year (if you don’t a 50% penalty applies).  You can take a minimum distribution out of one IRA for all IRA’s but retirement plans usually require that you take a minimum distribution out of each plan.  If you are still working you may not be required to take a minimum distribution out of the company plan that you work for (if you are not an owner or if you own less than 5% of the company).
  9. Consider Buying Equipment for Your Business.  The tax law gives you lots of options about how fast you can depreciate equipment.  You will want to consider your current and future income when deciding what depreciation option to use.