12 Year-End Tax Saving Tips

12 Year-End Tax Saving Tips

By Michael Maiorano, CFP®, CPA/PFS

As we again approach year-end, don’t forget about these 12 tax planning strategies:

  1. Contribute to a health saving account (HSA).
  2. Pay for first quarter 2018 college/qualified higher education expenses now in 2017.
  3. Plan to buy a car, boat or another big item? Purchase it in 2017 to get the sales tax deduction.
  4. Donate a year-end gift to a charitable organization of your choice.
  5. Take your required minimum distribution (RMD), if you are age 70½.
  6. Use some or all of your RMD to make a charitable gift.
  7. True-up your estimated tax payments. Due to the additional 0.9% Medicare Tax and/or the 3.8% surtax on unearned income, some taxpayers may face underpayment penalties.
  8. Resolve underpayment of your estimated taxes, if you are eligible, by taking a rollover distribution from your retirement plan.
  9. Utilize tax loss harvesting to lock down capital losses. You can do this by selling the shares of one position and buying shares in a similar position to maintain your market exposure, or selling the original position then buying back the same position at least 31 days later.
  10. Deduct your medical expenses in the year that you paid for them. This strategy would be especially beneficial if Congress eliminates such deductions beginning in 2018.
  11. Take advantage of tax-free gains. You may exclude all (or, in some cases, part) of the realized gain on the disposition of qualified small business stock (QSBS) held for more than five years.
  12. Find out if you are entitled to special tax relief, such as relaxed casualty loss rules and eased access to your retirement funds, due to the impact of Hurricane Harvey, Irma, or Maria. Plus, qualifying charitable contributions related to Hurricane Harvey, Irma, or Maria disaster relief aren’t subject to the usual charitable deduction limitations.

Talk to your CPA or financial advisor to identify which of these tax planning strategies work best for you.

Finally, if you have any questions about this post or any other tax-related concerns, please don’t hesitate to contact Michael Maiorano at mmaiorano@truewealth.com or 404.487.0505.

Reference: © 2017 Thomson Reuters/Tax & Accounting. All Rights Reserved.

© 2017 TrueWealth, LLC (TW). All rights reserved. Any use of information contained in this blog post, including reproduction, modification, distribution or republication, without the prior written consent of TrueWealth, is strictly prohibited. We have taken all reasonable care and precaution to ensure that the information is fair and accurate, or has been compiled from sources believed to be reliable. Nevertheless, we do not make any representations or warranty, express or implied, as to the accuracy, completeness, or fitness for any purpose or use of the information. The information may not in all cases be current and it is subject to continuous change. Accordingly, you should not rely on any of the information as authoritative or a substitute for the exercise of  your  own skill  and  judgment  in  making  any  investment  or  other  decision.  Any references to rates of return are for illustrative purposes only and should not be construed as an estimate or guarantee of future performance. We shall not be liable for any direct, indirect, or consequential loss arising from any use of or reliance on the information from this brochure. The recommendations developed by TrueWealth are  based  upon the  professional  judgment  of TrueWealth and  its  individual  advisory  affiliates  and  neither TrueWealth nor  its  affiliates  can guarantee the results of any of their recommendations. Clients at all times may elect unilaterally to follow or ignore completely, or in part, any information, recommendation, or advice given by TrueWealth and its affiliates.