As we enter the year’s end, as well as one of the craziest elections we’ve witnessed, we are all left wondering how to tax plan with so many pending changes out there. The President-Elect is saying that drastic changes will be made in the first 100-200 days of 2017.
For those that aren’t following all of this, President-Elect Trump, Vice President-Elect Pence, and Speaker of the House Paul Ryan say they are going to tackle the Executive Orders, the Affordable Care Act, and tax reform all within the first 100-200 days.
Personally, I hope they do! That brings us back to, “How should we tax plan?” Most likely changes will be applicable to 2017 taxes; however, I am not saying retroactive changes cannot be done. It just isn’t the norm!
Right now, we are telling everyone to continue their year-end tax planning, just as the laws are written today. When we meet for your tax interview, we will shed light on changes that will affect you and your 2017 tax return.
Just a few of things to think about now:
Business owners this deduction is for you! Buy equipment and write it off. Under Section 179 you can deduct up to $500,000 in equipment purchases. So, if you are in need of new equipment – this is a good time to take advantage of this deduction!
Next, defer your income. If you have the opportunity to push back some of your income until next year, this would be a good year to exercise that option. I would be very surprised if we don’t see tax reform next year. (Especially since both political parties and all three branches of government want to see it happen.)
Consider selling any loser investments that you may have. Check in with your investment advisor about any investments that just aren’t performing. It might be in your best interest to sell them and take a loss. If you wait at least 31 days, you can buy them back!
Finally, max out the contributions deposited into your retirement accounts such as IRA’s, 401(k)’s, 403(b)’s, and your health savings accounts.
These are just a few year-end tax planning ideas that I’m sharing with you. If you would like more tax planning ideas, please feel free to contact our office and we will be very happy to set up a year-end tax planning meeting.
NOTE: This information should not be considered as tax/legal advice. You should consult your tax/legal advisor regarding your own tax/legal situation.