Some Last-Minute Tax Moves
Here are five last-minute tax-saving ideas. But act soon, the tax year is quickly nearing an end.
- Make a late-year charitable donation. Even better, make the donation with appreciated stock. You can often receive the higher value donation without paying capital gains.
- Make contributions to your retirement plan AND take any required minimum distributions from your retirement accounts. The penalty for not taking minimum distributions can be high.
- Take any final investment gains and losses. Net your capital losses against your higher taxed ordinary income whenever possible. You can also take up to $3,000 in capital losses each year.
- Gather up non-cash items for donation, document the items, and give those items in good or better condition to your favorite local charity.
- Consider making any final gifts to dependents. While the “kiddie tax” may require applying a higher tax rate to your children’s earnings, there is an amount that is taxed at their, usually lower, tax rate.
Reminder: Remember to avoid putting cash in the kettle. While it may “sound” good, writing a check is a much better idea as cash donations are now no longer tax-deductible without a receipt, canceled check, or statement.
Need help with tax planning? Contact us for more information.