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Our 12 favorite Year-End “Tips” to Discuss With Your Tax Advisor:

December 18, 2019

12 Tips to Discuss with Your Tax Advisor:


Tip #1: Get in the Spirit of Giving (Don’t forget yourself and your family)

Give the gift of security and tax deductions to your family by maximizing your retirement savings. Many investors are not saving enough for their retirement. Get a little more into your retirement before the end of the year, or if times are tight in 2019, consider increasing it now for next year.

Tip #2: Give More to Tiny Tim

Accelerate your charitable giving (or real estate taxes) for 2020 into 2019. Recent changes in tax rules mean you may not be eligible to itemize your charitable deductions unless you lump two years of giving and taxes into one calendar year. And, if you are retiring in 2019, you may find giving this year lowers your taxes more than it would in 2020.

Tip #3: Be a Wiseman about Charitable Gifts

The biggest mistake we see donors make is giving their charity a cash gift, when giving an appreciated stock might have lowered both their income taxes and capital gains! Be careful though – you’ll get a lump of coal if you give a stock that you haven’t held for enough time.

Tip #4: December is Actually Harvest Time

Check your mutual funds and investment accounts in December to get an idea of your capital gains for 2019. Harvesting losses not only might offset all of your capital gains, but you might even be able to deduct up to $3,000 of losses against your income.

Tip #5: Keep the Grinch At Bay for 2020

Beware of Social Security and Medicare thresholds. As a retiree you need to keep a close eye on these. If you cross one unaware you could get a Grinch surprise in your stocking next year: higher premiums or smaller checks!

Tip #6: The Gift that Keeps Giving

Did you recently inherit a retirement account? This trick is for you. Consider “stretching” the required distributions over your lifetime. This will keep your marginal tax rate lower and preserve the account for years to come.

Tip #7: The Best Gifts Don’t Always Come in a Box

Consider gifting to your children and grandchildren. This may lower your estate and income taxes in future years and, depending on your state, you may even get a deduction if you give using a 529 College Savings Plan. You can give up to $15,000 per person per year without filing a gift-tax return.

Tip #8: Give Your Minimum to Get the Maximum

If you are over 70 ½, donate your Required Minimum Distribution directly to your favorite charity. This could be a great way to get the maximum tax benefits for retirees.

Tip #9: Don’t Get Scrooged

Everyone feels the pinch this time of year. So, why not start saving now for Christmas next year? Have your employer automatically deposit a small amount of each 2020 paycheck into a “Christmas” account.

Tip #10: Focus on Your Community

Christmas is a great time to focus on what matters most: family, friends, and community. If you run a small business, you give back in so many ways, including financial security for those who labor with you. Re-evaluating your retirement plan type could benefit you, your workplace, and community.

Tip #11: Celebrate the Love

This tip is sure to bring more peace on earth or at least to your significant other! Ifyou have a single-income household, consider a spousal IRA. For some families this is a great way to boost retirement savings and/or to find a nice tax deduction.

Tip #12: For kids from 1-92 (or older...)

Consider a partial Roth conversion for your Individual Retirement Accounts. A conversion moves your account from pre-tax to post-tax status. Using up all of your lower tax brackets before you are forced to take RMDs could make you one of the wisemen.

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