Making Sense of: Year End Tax Planning

There are many variables when planning for taxes, here are some tips! Remember every tax situation is different and you should contact us or your tax professional for more information.

  • Our first tip deals with income. If you are in a higher income tax bracket this year than you expect to be in next year, or vice versa, you can either defer or accelerate income into this year or next year to lower your overall tax rate.
  • If you are in the 15% tax rate or lower, you can recognize capital gains at a 0% tax rate.
  • Another way to offset your capital gains, if you have them, is to recognize capital losses to offset those capital gains at a 0% tax rate.

Every taxpayer is allowed to deduct either itemized deductions or the standard deduction, whichever is higher.

  • If your itemized deductions tend to be the same as your standard deduction each year, you may want to double up on your itemized deductions every other year. For example: Paying your real estate taxes for one year in January and then paying again in December of the same year to double up.
  • Double up on charitable contributions in one year; that way you can deduct your itemized deductions every other year and deduct your standard deduction in the remaining years.

I hope this helps!

-Matt

© 2015 Matthew D. Brehmer and Crummey Estate Plan.

 

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2 comments

  1. There is a lot to getting your taxes planned out accurately. I think we all miss out on some amount of return by failing to understand how we can correctly fill out our forms for itemized deductions or what have you. I appreciate the tips you have provided in how to make the best use out of your taxes. Sometimes, it’s wise to hire a professional to help you through the process, at least the first time.

    Like

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