Year-End Tax Planning

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Prepared by Jarrett Prince, CPA – Staff Accountant

As another year comes to a close, it is time to start thinking about year-end tax planning. This may be truer this year than it ever has been before due to the major tax changes brought on by the Tax Cuts and Jobs Act. As everyone’s situation is different, we wanted to highlight a few items to consider before the end of the year. We encourage you to reach out to us so that we can answer any questions you have and offer our advice as to what best fits your situation.

  • Have you taken your Requirement Minimum Distributions from your retirement plans? This is especially important if you reached 70 and a half years of age during 2018.
  • Do you have stock options you could exercise?
  • Have you considered converting a Traditional IRA into a Roth IRA?
  • Are you planning to contribute to a Traditional or Roth IRA before 4/15/19?
  • Have you considered donating appreciated securities?
  • Have you considered making your charitable contributions out of your RMD?
  • Under the new tax law, certain property and equipment is eligible for 100% expensing. Are there purchases you are considering and would it make sense to buy them before year-end?
  • If you had close to 24,000 of itemized deductions in 2017, you may want to consider bunching some of your expenses (i.e. making 2018 and 2019 charitable contributions in 2018 and prepaying mortgage interest for January 2019 or waiting to make 2019 and 2020 charitable contributions in 2019 and paying 13 months of mortgage interest in 2019).
  • Have you set up a college savings account for any of your children or grandchildren? There can be tax savings on your contributions to qualifying accounts.
  • If you have an unusual, large capital gain, you may want to ask us about opportunity zone funds.
  • Do you have appropriate documentation for business expenses and business mileage?
  • Will you need to file 1099’s by January 31, 2019? They are required to be issued by businesses to non-corporate vendors that were paid $600 or more for services during 2017 and the penalty for failure to file with the IRS or failure to furnish the 1099 to the vendor can reach $270 (so potentially as much as $540 for each qualifying vendor not issued a 1099).
  • Does your business have 199A Income? (If you want to learn more about 199A, please click here)
  • If you planned to set up a retirement plan for your employees, you should do so by the end of the year.
  • Have you made all of your quarterly estimated payments, or would you like a detailed 4th quarter projection?
  • The federal deduction for State and Local Taxes (i.e. real estate taxes, personal property taxes, and state income tax) will be capped at $10,000 combined under the new law.

Please contact us if you have any questions about year-end tax planning and we will be happy to help.

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