Key Strategies to Help You Maximize Your Tax Benefits
The Tax Cuts and Jobs Act has likely made some of your previous tax strategies obsolete. This month in the Small Business Monthly “Financial Fitness” column, Karen Stern, Partner in Charge, Entrepreneurial Services Group, shares some new strategies that could potentially benefit you.
Thanks to the passage of the Tax Cuts and Jobs Act, some tax strategies from the past are no longer practicable. Look at the ideas below and see if they apply to your tax situation.
With the increased standard deduction, people may wonder if they can still reap tax benefits while supporting causes they care about. The answer: Yes! Consider making several years’ worth of charitable contributions in one year or utilize a Donor Advised Fund. Bundling your contributions into one year will help you exceed the standard deduction and ensure you get tax benefits for your “years” of contributions. You may also want to consider making qualified charitable distributions from your IRA, which allows you to benefit from charitable giving even if you don’t itemize your deductions.
Your small business can get a tax credit if it provides at least two weeks of paid family and medical leave and the pay is not less than 50 percent of the employee’s wages. The credit is a percentage of the amount of wages paid to a qualifying employee while on leave. The minimum credit is 12.5 percent of wages, and the maximum is 25 percent. However, the employer must reduce its deduction for wages paid by the amount of the credit.
Consider converting your traditional IRA to a Roth IRA. The tax rate is not likely to be lower than it is now. You can also make Roth IRA contributions for your children with summer jobs.
For more tax strategies or a customized strategic tax plan, contact Debbie Vandeven, Industry Leader for Private Client Services at Brown Smith Wallace at firstname.lastname@example.org or Karen Stern, Partner in Charge of the Entrepreneurial Services Group at Brown Smith Wallace at email@example.com.