End-of-2016 Tax Tips
With 2016 winding down, now is the time to ensure everything is in order for your 2017 tax return. Karen Stern, Partner in Charge of the Brown Smith Wallace Entrepreneurial Services Group, discusses a few ways to utilize end-of-year tax planning, in this month's "Financial Fitness" as featured in Small Business Monthly.
One of the best ways to maximize your tax refund is to be proactive about tax planning before the end of the year. That means now is the perfect time for you to tie up loose ends and take the necessary steps to make the most out of your 2017 tax return.
Here are a few tips to make the rest of 2016 count for your bottom line:
- Defer income. Income is taxed in the year it is received, so by deferring billings until late December, you could ensure you won’t receive payment until 2017.
- Donate and get a last-minute tax deduction. Making a charitable contribution during the holiday season is a great way to give back and also a great way to get a deduction. Just make sure you have a receipt, regardless of the amount.
- Engage in loss harvesting. Selling investments to realize losses allows you to then offset any taxable gains you have realized during the year.
- Contribute to retirement accounts. Increase your 401(k) contributions so you are investing the maximum amount allowed ($18,000 for 2016, $24,000 if you are age 50 or over).
No matter your year-end tax strategy, just make sure you have a plan in place to ensure a smooth 2017 tax season. If you have any questions about your tax plan, check in with your tax adviser.