Year-End Tax Planning Ideas

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We have 2 weeks left in December to try and mitigate your tax liability for 2015. The tried and true tax savings ideas are almost always the same from year to year.

If you are profitable in 2015, then consider purchasing assets you are planning on needing soon anyway in December to accelerate the tax deduction for depreciation. The Section 179 deduction is back down to $25,000 unless Congress passes some last minute legislation to get it back up to the high limits we have seen the last several years. But if you have not spent $25,000 on new assets this year and have some needs, buy those assets in December to take advantage of the tax deduction in 2015 instead of 2016.

Fund your retirement plan. If you have not maxed out your retirement funding for 2015, then consider increasing the funding for those plans that are calendar in nature…employer provided 401(k) plans, etc.

Make Charitable contributions in December to get that deduction. If you have time over the holidays, clean out the garage, closets, and storage to find non-cash donations that you can make before the end of the month. It costs you nothing, gets the clutter out of your house and gets you a nice tax deduction.

Check your investment portfolio and see if it is time to sell any investments that have an unrealized loss. If the stock does not look like it will recover, cut your losses and sell so that the loss can be used to offset other gains.

Fund your children’s or grandchildren’s College Savings Account or 529 plan. If you are a resident of Colorado and fund a Colorado plan, you get a state income tax deduction for the contribution. Limits apply as to amount, so check with your tax advisor first.

Remember to get your appointment set with your tax professional as soon as possible to discuss year-end tax planning, as December is almost over. And also for your 2015 tax preparation. The sooner you make the appointment, the more likely you are to get an appointment that works for you.

 

Chicago Tribune 15 Year-end Planning tips

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