Last Minute Tax Planning Ideas
Written by: Brad Brown, CPA
It is hard to believe that 2016 is drawing to a close. The new year will be here before we know it, but there is still time to take some last minute steps to reduce your 2016 tax liability.
Here are seven ideas to consider – just be sure to act by December 31:
- Pay your 2016 property tax bill that is due in early 2017.
- Pay your fourth quarter state income tax estimated payment that is due in January 2017.
- Incur deductible medical expenses (if your deductible medical expenses for the year already exceed the applicable floor).
- Pay tuition for academic periods that will begin in January, February or March of 2017 (if it will make you eligible for a tax deduction or credit).
- Donate to your favorite charities.
- Sell investments at a loss to offset capital gains you have recognized this year.
- Ask your employer if your bonus can be deferred until January.
Keep in mind that these strategies may not make sense in all situations. For example, if you will be subject to the alternative minimum tax this year, or anticipate being in a higher tax bracket next year, taking some of the steps above may not produce the best results in your case. Please contact our firm if you would like us to review your situation and discuss what options may work best for you. We would be happy to go over these ideas as well as any others that could help you maximize your tax savings for 2016.