Year End Tax Tips
While you are probably getting ready for Thanksgiving and the holidays, it is also a good time to think about taxes. This is a great time of year to call or sit down with your tax advisor, to discuss what your tax situation is looking like and things you can do before the end of the year. Below are a few ideas for things to discuss with your advisor.
- Income – Income is taxed in the year it is received. If you are an employee, it may be difficult to postpone wages, but if you may be able to defer a bonus. For those of you who are self-employed, there are more options. For example, you could delay billing a client until January to push income into next year. You could also charge deductible expenses to a credit card in December, allowing you to claim the expenses, while not paying the credit card bill until January.
- Itemized Deductions – This year the standard deduction went up and the SALT deduction is limited to $10,000. What this means is that you should discuss with your tax advisor whether or not you will be itemizing. Deduction options include: estimates paid to the state, medical expenses (subject to floor), and donations (KEEP THOSE RECEIPTS). Another item to explore with your advisor is whether or not you are subject to alternative minimum tax.
- Alternative Minimum Tax – Accelerating tax deductions can cost you if you are subject to AMT or if you inadvertently trigger it. This is why it is important to talk to your tax advisor.
- Loss Harvesting – Your investment strategy can play a role in tax planning. If you have capital gains, sometimes you can realize losses to negate them. This is something to discuss with your financial advisor and we would be happy to refer you to an advisor if needed.
There are multiple topics to discuss and your tax advisor should be able to provide clarity on these tax issues. So while you are getting ready to eat turkey, celebrate the holidays, and brave the cold weather, make sure to reach out to your tax advisor to make sure you are taking advantage of all that is available to you and planning accordingly. If you have any questions, please reach out to us at Elias Strauss CPAs.