Some year end tax tips

December 26, 2017 Written by

The clock is ticking down to 2018 … but you still have a few weeks left to make some last-minute tax moves. Take a look at these five tips and save a little more this year.

  1. Check the amount of 2017 tax you have prepaid through withholding and quarterly estimates ASAP and consider prepaying state and local taxes. ┬áIf you’ve underpaid, consider increasing your withholding before year-end. Withholding is considered to have been paid evenly throughout the year. This is to help prevent you being charged underpayment penalties for 2017. In 2018, state and local taxes will be limited so it’s best to maximize this deduction by prepaying state and local taxes before the end of the year.
  2. Make sure you have the correct tax status. If you got married or divorced this year, be aware that your marital status as of Dec. 31 determines your tax status for the whole year. If you are in the process of a marital status change, know that altering the dates of a year-end event to the new year may affect your taxes.
  3. Plan for losses. Check your basis in any S corporation in which you are a shareholder and where you expect a loss this year. Be sure you have sufficient basis to enable you to take the loss on your tax return.
  4. Use this year’s annual gift tax exclusion. If you make annual gifts to family members or others, make sure you complete your gifts for 2017 by Dec. 31.
  5. Consider equipment purchases before Dec. 31. Taxpayers must usually deduct the cost of business property over several years. The Section 179 election allows taxpayers to expense up to $510,000 of new and used property purchased and put into service in 2017. Property such as machinery, equipment and furnishings usually qualify. Be careful with special rules that apply to vehicles and personal computer.

Remember time is getting short. Contact our office if we can be of any assistance.

 

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Written by: Doug Rodrigues