Smart Tax, Accounting & Planning Ideas from your Trusted Business Adviser in Virginia Beach
Uncertainty Hampers 2017 Year End Tax Planning
As of this writing, year-end tax planning is clouded by questions about federal legislation. President Trump and many of the Republicans in Congress favor changes that would affect the tax code. Currently, the success they’ll have in their efforts is difficult to predict. The proposed demise of certain itemized deductions are worrisome. In some circumstances, accelerating medical bill expenses, and the elimination of deductions for state estimated and property tax may affect 2018. Learn more in this month’s newsletter.
Questions? One vital step is to arrange for a tax planning meeting with our office in late 2017 to address your specific situation. Call (757) 420-5778 or send us an email.
Year-End Planning for Investors
Regardless of future legislation, some tried and true strategies will help investors trim their tax bill in 2017. Year-end loss harvesting can be worthwhile.
Year-End Retirement Tax Planning
If your company sponsors a 401(k) plan, your employer may offer a match. Make certain that you’re contributing at least enough in 2017 to get the full match, which is essentially free money. The same is true when you’re setting up your 2018 contributions late this year.
Year-End Tax Planning for Charitable Donations
Some surveys indicate that more than 30% of all charitable giving occurs in December, and that over 10% of donations are made in the last three days of the year. The year-end holiday spirit may be a factor in the early winter philanthropy, but taxes probably play a role, as well. A check you write to your favorite charity in December gives you a tax deduction the following April, but if you wait until New Year’s, you’ll have to wait a full year for the tax benefit. To do well while doing good, you might reconsider the typical practice of writing checks for gifts to charity. Instead, give appreciated securities. Learn more in our November newsletter.
Year-End Business Tax Planning
IRC Section 179 permits “expensing,” or first-year tax deduction, of outlays for business equipment that otherwise would be recovered through depreciation over many years. For 2017, expensing the costs of up to $510,000 of equipment is allowed, with a phase-out beginning after $2.03 million of purchases. there is considerable uncertainty about whether tax legislation will pass this year and what such a law might include. Lower tax rates are a possibility. Consequently, you might plan to defer business income into 2018, when tax rates might drop, and accelerate company deductions into 2017 to offset highly taxed income.
Use our handy tax calendar for upcoming tax dates in November and December of 2017.
Stephen Merritt is a full-service accounting and cpa firm in Virginia Beach offering tax preparation and accounting services for small to medium-sized businesses and their families. Our accounting services and tax services include QuickBooks training; Financial Statements preparation; Compilations, Reviews and Audits; individual, corporate and payroll tax return preparation; and new business formation. Give us a call at 757-420-5778 today for more information, or email us now.