2016 Year-End Tax Tips
Santa Claus is coming to town and Uncle Sam isn’t far behind. Here are some year-end tax tips to help ease the pain when you file your 2016 income tax returns. Remember, failing to plan is planning to fail.
Small Business Moves:
Are there any purchases that you’re planning to make in early 2017? If your cash flow allows, purchase the items in 2016 and get the deduction sooner.
In order to defer some income, hold off on invoicing until 2017. Once again, only do this if your cash flow allows.
If you have any stocks that are underperforming, now is a great time to unload them. You can use these losses to offset any capital gains from earlier in the year. You can also offset up to $3,000 against ordinary income (i.e. wage income) so if you have something that isn’t performing like you had hoped, perhaps it’s time to sell.
Conversely, if you have a capital loss carryover from a previous year, it may be a great time to unload a winner. You can offset your current year gains against prior year losses if they are similar gains (long-term gains offset long-term losses, short-term gains offset short-term losses).
If you haven’t maxed out your retirement account contributions, you can contribute more pre-tax dollars and get a tax deduction, thereby lowering your taxable income.
With the holiday season in full swing, it’s a great time to help out in your community or with a cause that is near and dear to you. Even if you don’t have money to contribute, you can still donate clothing, furniture and other goods to local charities and get a deduction for the value of your donation. Be sure to get a receipt and file it with your other tax documents
These are suggestions but this is not all-encompassing. If you have any questions, please do not hesitate to reach out to me.