10-Year-End Tax Tips
With the end of the year looming, the window is quickly closing for taxpayers who want to minimize the taxes they will pay next spring. Although it’s tempting to take action based on expected changes to the law, some finance experts urge caution. Taxpayers shouldn’t make rash decisions based on a bill which may or may not become law. However, there are some smart money moves that can help hedge against potential changes.
Tax Changes Are Coming Next Year, but You Can Plan for Them Now
Congress may spend most of the month ironing out the differences in their tax bills and may not enact a new tax code until the New Year. Either way, high-earning taxpayers cannot afford to wait and see what happens; they need to act this month before certain opportunities go away. This articles includes strategies to follow for those who would like to take advantage of tax benefits now.
MBAF Places First in DBR Best of Survey
MBAF is honored to have been voted #1 in four categories in Daily Business Review’s “Best of 2017” Survey: best local accounting firm that provides overall litigation support, best local accounting firm that provides real estate support, best local provider of forensic accounting, and best local provider of business valuation.
Deduct Now, Donate Later: Donor-Advised Funds Offer Significant Benefits
If you’re planning to make significant charitable donations, consider a donor-advised fund (DAF). A DAF offers many of the tax and estate planning benefits of a private foundation, at a fraction of the cost. Most important, a DAF allows you to take a significant charitable income tax deduction now, while deferring decisions about how much to give and to whom until the time is right.
Year-End Retirement Tax Planning
Many companies now offer a 401(k) which allows an after tax Roth 401(k) contribution. With the traditional version, contributions reduce taxable income and the current tax bill, but future distributions will be taxable. Roth 401(k) contributions offer no current tax benefit, but distributions after age 59½ will be tax-free if you have had the account for at least five years. If both versions are available, which should you choose for 2018 contributions?
Year-End Tax Planning for Charitable Donations
Some surveys indicate that more than 30% of all charitable giving occurs in December. The year-end holiday spirit may be a factor in the early winter philanthropy, but taxes probably play a role, as well. A check you write to your favorite charity in December gives you a tax deduction the following April, but if you wait until the New Year, you’ll have to wait a full year for the tax benefit.
Is Your Company Gift Taxable?
During the holiday season, it’s natural for business owners to think about giving something to key individuals. On your list might be your employees, customers, suppliers, or others who helped your business during 2017. If you haven’t already made plans, do so quickly so the gifts may be distributed before year-end.