10 Year-end tax guide tips

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10 year end tax-planning tips

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Year-end tax guide tips


Accelerate deductions and defer income.

Consider deferring bonuses, consulting income or self-employment income. On the deduction side, you may be able to accelerate state and local income taxes, interest payments and real estate taxes.


Bunch itemized deductions.

Many expenses can be deducted only if they exceed a certain percentage of your adjusted gross income (AGI). Bunching itemized deductible expenses into one year can help you exceed these AGI floors.


Make up a tax shortfall with increased withholding.

If you’re in danger of an underpayment penalty, try to make up the shortfall by increasing withholding on your salary or bonuses.


Leverage retirement account tax savings. It’s not too late to increase contributions to a retirement account. Contributions reduce taxable income at the time that you make them, and you don’t pay taxes until you take the money out at retirement.


Reconsider a Roth IRA rollover.

It has become very popular in recent years to convert a traditional IRA into a Roth IRA. This type of rollover allows you to pay tax on the conversion in exchange for no taxes in the future (if withdrawals are made properly).


Get your charitable house in order.

A cash contribution must be documented to be deductible. If you claim a charitable deduction of more than $500 in donated property, you must attach Form 8283. For cars, attach the charity's acknowledgment with a description of the car.


Give directly from an IRA.

If you are 70.5 years old or older, using your IRA distributions for charitable giving could save you more than taking a charitable deduction on a normal gift. That’s because these IRA distributions for charitable giving won’t be included in income at all, lowering your AGI.


Zero out AMT.

The top alternative minimum tax (AMT) rate is only 28%; so you can “zero out” the AMT by accelerating income into the AMT year until the tax you calculate for regular tax and the AMT are the same.


Don’t squander your gift tax exclusion.

You can give up to $14,000 to as many people as you wish in 2016, free of gift or estate tax. You get a new annual gift tax exclusion every year, so don’t let it go to waste.


Leverage historically low interest rates.

An appreciating market and historically low rates create the perfect atmosphere for estate planning. The past several years presented a historically favorable time, and the low rates won’t last forever.


For additional tax planning tips for compensation and benefits, privately held businesses and private wealth planning, visit Grant Thornton’s Year-End Tax Guides 2016.

For Additional Tips

http://gt-us.co/2gcJn5z





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10 Year-end tax guide tips

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Transcript of 10 Year-end tax guide tips