Well, if you are a planner, here are some ideas to consider before year-end as you ponder upon another tax time and take control of your finances and/or tax situation:
- Understand and prepare for the new tax law changes called The Tax Cuts and Jobs Act (TCJA), which is the biggest federal change in years.
- Check to see if you can add to your employer-sponsored plan such as 401(k) if you haven’t set to max out the limit on contributions already.
- For losing assets sold like stocks, you can use capital losses to offset taxable capital gains. Capital losses that exceed capital gains are limited to $3,000 a year deduction ($1,500 MFS).
- For those who itemize, donate to a qualified charity or declutter for a cause before December 31. The percent limit for cash donations was increased from 50% to 60% of AGI, which equates to a larger deduction.
- For the self-employed, send invoices to clients or customers this year to be paid in full by end of December.
These are just some of the many general tax planning strategies such as accelerating or deferring income/expenses that taxpayers could implement as another tax year approaches. It’s important to take the time to review your plans to better ensure your strategy remains aligned with your goals.
I’m a CPA who assists individuals, entrepreneurs, and small businesses navigate the complex world of tax compliance along with other business issues through planning strategies or ideas. It’s essential that entrepreneurs stay focused on their own key craft and achieve a more balanced approach to any pursuits.
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