Don’t Ignore Tax-Saving Opportunities!

Published by Taylor Financial Group

Two weeks ago, we discussed year-end tax planning in great detail.  Clearly, we believe year-end planning is important.  So, this week, we want to drill down on just a few of the items we previously mentioned.  We don’t want you to ignore potential tax-saving opportunities.


Review Your Investment Portfolios

Scheduling a portfolio review meeting before the end of the year and assessing your investments to determine how stocks are performing can be crucial to potentially saving money.  For instance, if stocks are underperforming, selling those stocks now enables you to harvest those losses to offset gains in other stocks.  In the same way, strategically deferring the sale of other stocks until 2017 can minimize taxable income now.  There may also be other options we can discuss to manage capital gains from stock sales and dividends.


Consider Retirement Savings Accounts

If you do not already have a retirement savings account, such as an IRA or 401(k), opening one now, before year end, can give you an immediate opportunity to manage your tax burden.  Taxes on retirement savings accounts are deferred until they are cashed out, which means you can put any extra income into these types of accounts between now and the end of the year and reduce your taxable income for the year.  Not to mention, retirement savings accounts will also help you start building wealth for the future.

Year-End Giving & Gifting

Another proven method for reducing tax burdens is through charitable giving and gifting.  You can make year-end tax-deductible donations to one or more of your favorite charities.  Also, if your estate is facing estate tax, you can give away up to $14,000 per person per year up to a certain threshold without paying gift tax.  In this way, you can transfer money to friends and loved ones, while also effectively removing taxable estate value.  Another charitable option, which we mentioned last week, is setting up a charitable trust, which can be structured to benefit charities and loved ones at the same time.   This strategy can reduce taxes in the long term.


Changes in Income or Employment

It’s possible you started a new business, received a raise, lost your job, sold a home, or changed circumstances in some other way.  It’s important you discuss these types of changes with your financial advisor before year end – like, now!  Any significant increase or decrease in income may require an adjustment in tax planning.  If there are any issues that need to be addressed, we can usually find a solution.  But it is important to start talking about it now to so that we can create a plan.

Regardless of tax planning, it’s always a good idea to re-evaluate your situation with a financial advisor toward year-end.  This way, your advisor remains informed and can better provide new or different financial services to you.If you have any questions or wish to schedule an appointment to review your portfolio, please call our office.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advisory services offered through CWM, LLC a Registered Investment Advisor. LPL Financial is under separate ownership from any other named entity.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.  None of the information contained herein is meant as tax or legal advice.  Tax laws are complex and subject to change. Please consult the appropriate professional to see how the laws apply to your situation.

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