Time’s Running Out for Individual Year-End Tax Planning!

I woke up last weekend from my turkey-induced slumber and realized that we are already in December.  Luckily, we still have some time before the end of the year to help with last-minute tax planning, but time is running out.

Here are a few suggestions for individual taxpayers:

Accelerating or deferring of income: You should plan for your income taxes by looking at two consecutive years: the current tax year as well as the next. A little planning on the timing of the income can result in big savings.
Gains and losses: Consider selling securities with losses and offsetting your current year gains. You can fully offset your gains and you can deduct your net loss up to $3,000 per year. Any excess is carried forward indefinitely.
Itemized deductions: If you are close to the standard deduction amount, consider bunching itemized deductions in one year to get the most out of them and then claim the standard deduction in the other year.
Retirement plans: Take full advantage of available retirement plans. If you participate in your employers’ 401K plan, maximize your contribution and any employer matching.  If you don’t participate, consider the alternatives, such as an IRA, Roth IRA, SIMPLE IRA or SEP-IRA.
Charitable giving: Remember to keep proper documentation to support your charitable contribution. Also, consider gifting appreciated securities. You can claim the fair market value of the donation, and you do not have to pay the tax on the gain.

Lastly, review your withholding and estimated tax payments to be sure that you will not be subject to underpayment penalties. For more assistance with year-end tax planning, contact your Kaufman Rossin tax professional today.