Year End Tax Tips

Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

Published by Mark Lookabill

It’s not too late! Before the clock strikes midnight on January 31, you still have time to potentially take some steps to lower your 2016 taxes. Here are six of my end of year tax tips:

Check Your Required Minimum Distributions

For those of you that are required by Uncle Sam to take distributions from your traditional IRA account, do a quick verification that you have satisfied your distribution for 2016. This quick year-end tax planning tip is a reminder so you avoid paying up to a 50% excise tax if you fail to take the appropriate distribution.

Maximize Your Retirement Account Contributions

One important year-end tax planning recommendation is to maximize the contributions that you can make to retirement accounts. If you are eligible for a company sponsored 401(k), I would, at the very least, meet your employers match. Additionally, you may want to try to increase your own contribution in an effort to get closer to the maximum amount allowed; $18,000 for 2016 if you are under age 25 or $24,000 if you’re over the age of 50. It also applies to IRA contributions even though you have until April 18, 2017 to make a 2016 contribution, the maximum you can contribute is $5500 plus an extra $1000, if you are over age 50.

Flex Spending Accounts

There is still time to take a look at your flexible spending accounts. The “use it or lose it rule” generally applies when looking at your flex account. You may also want to check with your employer to see if they have adopted a grace period allowed by the IRS to actually set aside 2016 money into the beginning of 2017.

Tax-Loss Harvesting

Look at selling investments that have an unrealized loss. Taxes should never be the only reason to sell an asset, but if you are looking to make a change in your portfolio, selling out of a position with an unrealized loss can help to offset other gains. I would recommend consulting with your tax advisor and see if it would be valid to book a loss here before year end to offset any realize taxable gains. Additionally, if your losses exceed your gains, you can use up to $3000 to offset other income or you can book those losses for next year.

Verify Your W-4 Withholding

When looking at year-end tax planning or looking at proactive tax planning strategies into 2017, those of you who got married, divorced or had a baby may want to look at the allowances you claim on your W-4. The goal here from a strategic tax planning point is to reduce the potential for too high of a tax bill or too high of a refund. I know for some of you it feels good to get a big tax refund every year, however what you were ultimately doing is providing Uncle Sam a short-term no interest loan.

Pay It Forward

My final tax planning strategy is to look at your charitable contributions and accelerate what you potentially plan on doing in 2017 and make those donations in 2016. While this may not be suitable for everyone, you should at least be mindful of any last-minute deductions you can make in the calendar year.

 

For more information on what is tax planning and how to utilize strategic tax planning, contact a Wealth Advisor today.

cwm-cta-button

 

Share:
facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.
Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

RECENT POSTS

The True Value of a Financial Advisor

As an advisor, we get tasked with the burden of proof as to why someone should pay us to give them advice. If clients can do it all themselves or hire a computer to invest, what is the true value of having a financial advisor? Is it really worth it?

How Will You Measure Financial Goals in 2017?

Published By Ron Carson This is the time of year when many of us make resolutions and set big goals. Unfortunately, the promises we make to ourselves often get broken. Why? Many of us take the DIY approach, start out with great enthusiasm and, as life brings interruptions, gradually lose fo …

InvestmentNews Recognizes Ron Carson As 2016 Innovator

InvestmentNews named our Founder and CEO, Ron Carson, one of its 2016 Icons and Innovators. His unrelenting commitment to advance the profession of financial advice for the better and his passionate spirit for innovating the way financial advice is delivered are just a few reasons Ron stuck …

Seven Financial Actions to Consider Before 2017

Published by Scott Ford The last months of the year are always hectic due to the holidays, end-of-the-year projects at work, and, in terms of this year, a heated presidential election. While you likely have plenty on your plate, don’t neglect your financial strategies. Review these seven ac …
1 2 3 68 69 70 71 72 106 107 108

Get in Touch

In just 15 minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.

Schedule a Consultation