Tax Tips to Consider as 2017 comes to an end



December is an excellent time to consider year-end tax planning moves to save taxes for 2017. Once tax season gets underway in Q1 2018, it’s too late for these smart ideas.

Casualty loss deductions

The tax reform framework repeals the casualty loss itemized deduction for 2018, so try to complete your claims to support a 2017 tax deduction. The 2017 disaster tax relief bill for Hurricanes Harvey, Irma and Maria victims exempts qualified disaster-related personal casualty losses from the 10% AGI threshold. Victims don’t have to itemize; they can add this casualty loss to their standard deduction, and that part is deductible for AMT.

Accelerate state and local tax deductions

The current tax reform framework repeals itemized deductions for state and local taxes including income, real estate, property and sales and use taxes. States without an individual income tax, including Texas, Florida, and Washington, have real estate and sales and use taxes. For 2017, you can elect to claim sales and use taxes as an itemized deduction instead of state income taxes. If you are thinking about buying an expensive item that is subject to sales and use tax, consider purchasing it before year-end. Accountants are looking into ways for a business to treat some state and local taxes as a business expense.

The tax reform framework repeals state and local tax deductions and AMT starting in 2018 so your best chance at a deduction might be to pay state and local taxes due by Dec. 31, 2017. This is a change from previous tax years when individuals may have postponed state and local taxes to avoid AMT. Be sure to check the latest developments on tax reform before you make this decision close to Dec. 31 since there is blowback on the repeal of state and local taxes, and I expect there could be changes.

Tax Loss Selling

A taxpayer with capital gains can reduce taxes by selling losing securities positions, realizing capital losses, before year-end. This continues to be a smart strategy in 2017, however, if you already have a $3,000 capital loss limitation, tax loss selling won’t help.

Arrange required minimum distributions

Take RMDs from traditional IRA, Solo 401(k) plan, and employer retirement plans. Commence RMDs by April 1 of the year following the calendar year in which you reach age 70½. Per IRS.gov, “If you do not take any distributions, or if the distributions are not large enough, you may have to pay a 50% excise tax on the amount not distributed as required.”

Maximize charitable contributions

You should make tax-deductible donations before year-end by check and credit card. Property donations of clothing, household goods, and appreciated securities can also be deducted. The itemized deduction is calculated based on fair market value (FMV), or another acceptable method. The FMV of clothing and household goods is usually a small fraction of the purchase price. When you deduct the FMV of appreciated securities, you avoid capital gains taxes. For charitable donations over $250, the IRS requires a written acknowledgment letter. Expect a reduction of the contribution amount based on the value of goods and services you receive, for example at a charity dinner.

The IRS permits individuals age 70½ or older to make charitable gifts up to $100,000 per person, per year, directly from their IRAs, and this generates several tax benefits. The strategy is more tax efficient than taking an income distribution and potentially losing some of the deduction with the Pease itemized deduction limitation for upper-income taxpayers or using the standard deduction. Avoiding an IRA withdrawal lowers AGI, which may unlock middle-income deductions and credits and avert net investment tax (NIT). The charitable donation amount also counts toward meeting the required minimum distribution (RMD) rule. You may not receive goods and services in connection with this donation from the IRA.

These are just a few ideas that should be considered. For a free no obligation

consultation and review of your financial needs book online now.

#taxadvice #registeredinvestmentadvisor #wealthmanagement #FinancialPlan #Investmentexperts

brokercheck_edited.png

Privacy Policy. 

Akin Investment never sells your information. All information gathered on this website is for the purpose of helping our clients and nothing is shared or sold to any third party. We value our clients trust and privacy.

 

This web site contains links to other sites. Please be aware that we are not responsible for the content or privacy practices of such other sites.  We encourage our users to be aware when they leave our site and to read the privacy statements of any other site that collects personally identifiable information. 

 

External links disclaimer. Throughout our site you will find links to external websites Although we make every effort to ensure these links are accurate, up to date and relevant, Akin Investment Advisory cannot take responsibility for pages maintained by external providers.  Please note that external links from this website are provided as a courtesy. We take no responsibility for information contained on external links from this website. 

 

Registration or subscriptions

In order to use certain sections like our “Book online” feature on this website, a user must first complete the registration form.  During registration a user is required to give certain information (such as name and email address). This information is used to contact you about the services on our site in which you have expressed interest.  At your option, you may also provide demographic information (such as gender or age) about yourself, but it is not required. 

Legend

This site is intended for clients and interested investors residing in states where Akin Investments, llc is qualified to provide investment services. Akin Investments, llc is a Registered Investment Adviser, located in Biloxi, Mississippi registered with the State of Mississippi. Akin Investments, llc may conduct business in those states or locations in which it is registered or qualifies for an exemption or exclusion from registration requirements similar to or as provided for under established de minimis rules.

 

Akin Investments, llc website in no event shall the presence of this website on the internet be interpreted or construed as a solicitation to provide investment advisory services outside of the State of Mississippi, South Carolina or outside of those states with an established de minimis rule. If you have questions on your specific situation please reach out to Akin Investments, llc at (228)-229-5020.

 

Akin Investments, llc does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Akin Investments, llc. web site or incorporated herein, and takes no responsibility therefor. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

  

https://www.akininvestment.com
  • LinkedIn Social Icon
  • Facebook Social Icon
  • Twitter Social Icon
  • Pinterest Social Icon
  • Instagram Social Icon

228-229-5020

310 Abbey Court, J 8, Biloxi, Mississippi 39531

All Rights ©2015-2020 by Akin Investments, LLC. Proudly created with Wix.com