End of year tax planning

End of year tax planning

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April 2018 may seem like a long way off, but in tax terms, it's already here. In order to minimize your 2017 tax bill you need to start planning now. Here are some things you can do between now and the end of the year to help make your April 17 (Tax Day 2018) a little happier.

Give to charity

December is the season of giving, and by giving to a favorite cause you maximize your deductions for 2017. Be sure to think beyond cash: both your generosity and tax benefits can be boosted by donating appreciated stock or property. Remember though, you'll need a receipt to take a deduction for any charitable contribution.

Take your required minimum distribution

Fail to do so, you'll face a stiff penalty from the IRS; a 50% excise tax on the ammount you should have withdrawn based on your age, life expectancy, and the amount in the account at the begining of the year. Annual withdraws must be made by Dec. 31 to avoid the penalty.

Roth IRAs do not have required minimum distributions

Watch out for the alternative minimum tax

The alternative minimum tax (AMT) is designed to set a limit on the tax benefits and loopholes that the wealthy can employ; its purpose to help ensure that everyone pays a minimum amount of taxes. However, it wasn't - until 2013 - automatically adjusted for inflation so over time it came to affect more and more middle-class taxpayers. Be sure to discuss your risk of being subjected to the AMT with your tax advisor before the end of the year.

You can find helpful tax planning strategies for any time of the year in our Tax Center.

Need more insight? Let us be your guide.

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Associated Tags: Taxes

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