As 2017 comes to an end, there are several key tax strategies that we recommend our clients consider before December 31. This year’s tax guide will help you navigate the changing tax landscape.
For individual clients, year end tax planning can start with identifying any changes in personal situations, such as marital status change, moving, retirement, etc. If you’ve gone through any major life event in 2017, more than likely it will have a tax impact. There have also been changes in taxable income brackets since 2016, not to mention proposed tax law changes, that clients should review. The tax reform repeals state and local tax deductions starting in 2018 so your best chance at a deduction may be to pay state and local taxes due by December 31, 2017.
For business owners, this is the time to minimize taxes on business income. These strategies will vary depending on your business structure. For instance, a profitable C corporation may want to consider paying bonuses or make a tax-deductible profit sharing contribution this year to minimize corporate taxable income. All businesses should keep in mind that the tax accounting method (cash-method or accrual-method) your business uses determines when income must be recognized for tax purposes and when expenses are deductible. Timing strategies are vital in reporting business income, so ensure that income is being recorded accordingly.
To review more tax strategies please click on the link below to see the complete Earney & Company, L.L.P. end of the year tax planning guide. Feel free to reach out to us if you have any questions or want to see how these ideas could apply to your tax situation!