At the end of each year there are a number of things to consider that may have a positive impact on your tax obligation. Here is a list of fifteen ideas that may be worth a quick review.
1. Make last minute charitable donations. Pay attention to your itemized deduction limit to ensure your deduction will count.
2. Review and maximize use of the $18,000 annual gift giving limit.
3. Review your investment portfolio for capital gain and loss planning.
4. Use your annual $3,000 net capital loss limit to lower ordinary income if appropriate.
5. Maximize the kiddie tax threshold rules ($2,600 of unearned income taxed at your child’s lower tax rate).
6. Consider fully funding retirement accounts with your annual contributions.
7. Identify any potential household employees.
8. Consider donating appreciated stock owned one year or longer.
9. Review retirement accounts for required minimum distributions (RMD).
10. Review medical and dependent care funding accounts to ensure you do not lose contributions that do not roll over into the new year.
11. Consider retirement plan rollover options into Roth IRAs.
12. Estimate your tax liability and make any final estimated tax payments.
13. Create a list of expected 1099 and other tax forms you will be receiving.
14. Review your W-2 withholdings and file any changes with your employer for the upcoming year.
15. Begin organizing your tax records.
Should you have any questions on these ideas, ask for help prior to taking action. In many cases, the requirements and documentation needed are important to ensure you receive the full tax savings benefit.