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2019 Year-End Tax Planning

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Your time for planning is running out. To assure you maximize your tax savings this year review these tips with your CPA soon!

Income Tax Savings

  1. Consider delaying income until 2020 including: Bonuses, capital gains transactions and incentive stock options.
  2. Maximize deductions this year by paying the following by 12/31/2019: Mortgage interest, property taxes, State & local taxes and medical expenses. The standard deduction is $12,000 for an individual, and $24,000 for married couples. Caps on State & local taxes are at $10,000. Consider stacking deductions, ie. making a gift of $50,000 in year one, instead of $10,000 a year for 5 years, then taking a standard deduction in years 2-5.
  3. Make charitable contributions by 12/31/2019. Charitable deductions are not subject to State & local tax cap of $10,000.
  4. Use IRA Required Minimum Distribution (RMD) to contribute up to $100,000 to charity tax free.
  5. Make contributions to your 401K/IRA or other retirement plans. The benefit is an above the line deduction and reduces your Adjusted Gross Income. All earnings and growth are tax deferred until withdrawal. Deduction will be for 2019 but the contribution is not due until 4/15/2020.
  6. Consider Roth IRAs and Roth IRA conversions – in an increasing rate environment, playing tax now may be the smart move.
  7. Minimize capital gains. Harvest losses against gains and participate in Qualified Enterprise Zones.

Year-End Estate Gift Strategies

  1. Make 2019 Annual Exclusion Gift of $15,000 per person or $30,000 per couple.
  2. Consider larger gifts to take advantage of the lifetime Estate Exclusion of $11,480,000 while it lasts.
  3. Review all trusts for basis management.

The bottom line – Planning now can save you in April! Schedule an appointment with your CPA soon.

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