2017 Simple Year-End Tax Savings Ideas

November 14, 2017  | By Kevin Smith

(may not apply to you, always consider your cash flow and cash reserve first, and always consult your CPA for details)

  • Increase your pre-tax 401k contributions from your final paychecks of 2017. You are allowed up to $18,000 for the year ($24,000 if you are over 50).
  • Make an extra mortgage payment to increase interest deduction in 2017.
  • If you typically take a standard deduction and you own a home, you may be able to itemize if you paid your 2016 property taxes in January 2017 and you pay your 2017 property taxes in December 2017.
  • Charitable donations – deductible amounts to Public Charities are 50% of cash and 30% of personal property (other forms of charity and rates of deductibility apply, also subject to AGI limitations)
  • Not sure which charity to support yet, but you want to go ahead and make a donation and take the deduction? Ask us about Donor Advised Funds. This is a way to store your donations in an investment account, giving you time to decide the best way to allocate the funds to charity.
  • Do your kids or grandkids have earned income? If so, you can gift them funds to set up a Custodial Roth IRA.
  • More advanced strategies exist and may or may not apply to you. They typically take more time to plan and implement.

Important 2018 Tax Changes (as they stand)

  • 401(k) max contributions – $18,500 under 50 and $24,500 over 50
  • Annual gift exclusion increases by $1,000 to $15,000
  • Social Security maximum taxable earnings increases by $1,500 to $128,700
  • Income tax brackets – 2% inflationary increase across the board
  • Standard deduction – increased $250 for single and $300 for married
  • Personal exemption phaseouts – you can earn about $5,000 of additional income in 2018 before phaseouts kick in
  • IRA and Roth IRA phaseouts – modest increase to the level of income at which your IRA and Roth IRA tax benefits decline
Posted in: Tax Planning
Kevin X. Smith, CFA
  |  [email protected]

Kevin is responsible for advising clients for whom he is the lead financial advisor. He also manages the operations and development of the firm, and oversees all of the investments of Austin Wealth Management clients. Kevin is on a mission…Read More

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