Follow These Year-End Strategies to Maximize Your Tax Return in 2017
Today is the best day to start thinking about your tax return. Though
"Year-end tax planning can help reduce potential tax liability or give you a better idea of what you may owe ahead of time," said
1. Commit the maximum contributions to your retirement assets.
Income placed in employer-based retirement savings vehicles, such as 401(k) and 403(b) accounts, is excluded from taxable income. The maximum annual contribution to these types of accounts is
Business owners have some added flexibility as well, including additional plans to consider and additional time beyond year-end to make their contributions.
2. Take full advantage of potential deductions.
Taxpayers with deductions totaling more than
Business owners should accelerate business expenses as well, including their personal medical insurance. Certified public accountants can help assess the greatest possible tax benefit available to you.
3. Stall year-end income.
For businesses and individuals, there are often opportunities to defer taxable income into the next year. For example, if you are a cash-basis business, sending out invoices late in the year could result in your customers paying you next year rather than in 2016.
4. Make large purchases before the end of the year.
If your business needs equipment, you should consider purchasing and placing it in service before the end of the year. Doing so can create an opportunity to expense the entire cost of the equipment for federal income tax purposes. Individual states may vary on how much you can deduct in the first year. Review any business expenses you might accelerate with a certified public accountant to take advantage of potential deductions.
5. Review investment strategies.
Review your investment portfolio and consider selling underwater investments to capture capital losses that can offset capital gains you may have in 2016. There also may be a situation where it makes sense to create a gain to take advantage of low capital gain rates. Certified public accountants can research these options to help you preserve your investment position and meet your long-term financial goals.
6. Consider making gifts.
Although gifts aren't tax deductible, they allow you to transfer your assets to others and reduce your potential federal and
7. Organize your tax records.
For individuals, now is the perfect time to organize your records. Categorizing financial documents, such as education, gifts and charity, mortgage and property taxes, rental documents, and other fields that fit your household, helps save time when preparing your return.
For business owners, get your books up to date now. A certified public accountant can then determine if additional strategies are available knowing whether or not your business is profitable.
While these actions have short-term benefits, proper year-end tax planning can help you meet your long-term financial goals. Talk with a certified public accountant today about year-end tax planning and other issues affecting your tax bill.
Don't have a CPA? Visit CPAmeASAP.com or call 800.331.4288 to connect with a CPA today.
[Category: Accounting]
30FurigayJof-5698909 30FurigayJof
Sen. Alexander: Voters Expect New Congress, President to Fix Obamacare Emergency
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News