Money Matters

Year-End Tax Planning



It’s time to consider strategies that could help reduce your tax bill. But most tax tips and strategies are of little practical help without a good understanding of your current tax situation. This is particularly true for year-end planning. You can’t know where to go next if you don’t know where you are now.  Doing a few quick projections will help you estimate your present tax situation and identify any glaring issues you need to address while there’s still time.

Timing is everything. Now may be the time to consider delaying or accelerating income and deductions, taking into consideration the impact on both this year’s taxes and next. If you expect to be in a different tax bracket next year, doing so may help you minimize your tax liability. To delay income to the following year, consider delaying year end bonuses, delaying the sale of capital gain property or postponing receipt of distributions (other than required minimum distributions- which you need to make sure you have taken) from retirement accounts. To accelerate deductions consider paying medical expenses in December rather than January (if doing so will allow you to qualify for the medical expense deduction), prepay deductible interest, make alimony payments early or make next year’s charitable contributions this year.

The gifts that give back. If you itemize your deductions, consider donating money or property to charity before the end of the current tax year in order to increase the amount you can deduct on your taxes

Postpone the inevitable. To reduce your taxable income this year, consider maximizing pretax contributions to an employer-sponsored retirement plan such as a 401(k). If you qualify, you might also consider making a tax-deductible contribution to a traditional IRA or an after-tax contribution to a Roth IRA. You’ll generally have until the due date of your federal income tax return to make these IRA contributions.

Tax planning can be complicated. Consider seeking the assistance of a tax professional to determine what year-end tax planning moves, if any, are right for your individual circumstances.

Alternatively, if you’ve significantly overpaid your taxes and estimate you’ll be receiving a large refund, reduce your withholding accordingly keeping money this year instead of waiting for your refund to come next year.

screen-shot-2016-10-28-at-11-58-35-amMike Mungenast, Sr. Vice President, Senior Advisorscreen-shot-2016-09-27-at-10-14-35-pm

Vision Financial Group 

4505 Pine Tree Circle, Birmingham, AL 35243



Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016. Investment advisory services offered through Investment Advisors, a division of ProEquities, Inc., a Registered Investment Advisor.  Securities offered through ProEquities Inc., a registered broker-dealer and member of FINRA and SIPC.  Vision Financial Group, Inc. and West Alabama Bank are independent of ProEquities, Inc. Securities and insurance products offered are not bank deposits, have no bank guarantee, are not FDIC insured, and may lose value.

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