Year-End Tax Planning Tips

As we approach the end of the year, we have assembled some information that might help you lower your tax liability and prepare you for filing your 2015 tax return.
Do you have other tax planning items that are not on this list? Let us help you design a customized tax plan. Just give us a call or send us an email.

Need to file a 1099 form?

Most of us have been the recipient of a 1099 form at one time or another. For instance your bank sends them to you for any interest you have received throughout the year. But are you required to file any 1099’s and specifically any 1099-MISC forms? Generally speaking, if you have paid a person (or entity that is not a corporation) at least $600 during the year in rent or for services, you are required to file these forms with the IRS and send a copy to the recipient by February 1, 2016. The most common use of this form is to report earnings for work done as an independent contractor, such as a construction contractor.
If you need some help with this, we will be glad to prepare these forms for you.

Contributions to retirement accounts may lower your tax liability

Consider contributing the maximum to your retirement accounts since money contributed to a tax-deferred retirement plan is excluded from taxable income.


Investment strategies

  • Now is the perfect time of year to meet with your financial advisor and review your portfolio. You might be able to sell loser investments to offset gains which will reduce your capital gains tax liability.
  • Check your IRA distributions. If you are over age 70 ½, you must take required minimum distributions. Your IRA plan provider will help you set these up. Failure to take minimum distributions can result in a substantial penalty.
  • Consider converting to a ROTH IRA. If you think your tax rate is going to rise in the future, you could benefit from converting to a ROTH IRA now. Contact us today to see if a conversion is right for you.

Ways to maximize your deductions

You are able to itemize deductions if they exceed the Standard Deduction of $12,600 for Married Filing Jointly or Qualifying Widow(er), $9,250 for Head of Household, or $6,300 for Single or Married filing separately.

Some ways to maximize your itemized deductions are:

  • Give to charity. Not only can you deduct monetary or item donations to qualified charitable organizations, you can also give appreciated stocks or mutual fund shares that you have owned for more than one year. You can deduct the market value on the date of the gift and you avoid paying capital gains tax on the built-up appreciation.
  • Make an extra mortgage payment. The interest you pay is deductible.
  • Pay your real estate taxes before the end of 2015. It is also tax deductible.