1. Maximize Investment Tax Benefits. If you have investments, now is the time to recognize loss on stock transactions and how they could offset gains. Also if you have any capitol loss carryover from prior tax years now is the time to recognize how it will come into play this year.
2. Open a 529 Plan. Whether you have kids or grandkids - setting up a 520 plan for contributions can help reduce your tax liability. Contributions must be made by the last day of the year.
3. Gifting. You can give up to $14,000 per year to anyone you’d like without tax consequences. This can be particularly important to understand around the holiday season.
4. Charitable Giving. Supporting your favorite charities has its advantages tax wise. Be sure to calculate those dollars and have them ready for your tax advisor!
5. Health Insurance. Open enrollment for Medicare starts mid-October and ends in early December. Be sure to discuss this with your advisors to be eligible for the tax benefits related.
6. Accelerate deductions. Making purchases before the year end will make them eligible for your 2016 tax deductions. Be sure to talk with your advisor about whether deducting things this year or next would be best for your business. Also, for example, if you have medical bills outstanding and you are going to exceed the minimum needed for a medical deduction this year - timely payment of those bills outstanding would result in a bigger 2016 deduction.
7. Delay Income. If you predict you may be in a lower tax bracket next year waiting to send out late in the year work invoices can help equal out the income between the two years.
There is never a bad time for tax planning!