https://retirementplanningscottsdale.com/2019/12/24/anil-vazirani-scottsdale-investment-advisor-says-theres-still-time-for-year-end-estate-and-tax-planning-strategies/ Anil Vazirani Scottsdale Investment Advisor says there’s still time for Year End Estate and Tax-Planning Strategies
Make use of annual exclusion gifts and lifetime exemption
The annual exclusion gift is the most common method of tax-free giving. In 2019, you may make outright gifts of up to $15,000 ($30,000 for married couples) in cash or property to an unlimited number of individuals without incurring any gift taxes or reducing your lifetime exemption from gift and estate tax.
Time your charitable gifts
Taxpayers can continue to deduct contributions to public charities up to 60% of their adjusted gross income, while no longer facing the phase-out of itemized deductions. If you cannot itemize their deductions due to the increased standard deduction ($12,200 single filers, $24,400 married couples filing jointly), it may make sense to “bunch” charitable gifts. By making a more substantial charitable gift this year equivalent to what might be given over several years, that gift should be large enough to itemize.
Harvest capital losses to offset capital gains
Should losses should be “harvested” to offset capital gains? Tax-loss harvesting is an end-of-year strategy by which underperforming assets are sold at a loss to offset realized investment gains with the aim of reducing overall tax liability.
Employ income and deduction timing strategies
It could be beneficial to accelerate or postpone income from year to year so that the income is taxed in a lower-income tax bracket. If tax rates are expected to be lower in 2020 due to an expected drop in income, it may be beneficial to defer income until after the New Year. Deduction timing is also an important part of year-end planning.
Maximize contributions to tax-advantaged accounts
Consider taking full advantage of available tax-advantaged accounts, such as employer-sponsored 401(k) plans, IRAs, health savings accounts and 529 plans. These accounts are subject to certain annual contribution limits. For example, in 2019, the maximum annual contribution to a retirement account is $19,000, with taxpayers over 50 eligible to contribute an additional $6,000.
Good planning is the key to long-term success!
For more information: https://www.wealthmanagement.com/estate-planning/year-end-2019-top-5-estate-and-tax-planning-strategies
Anil Vazirani is president of Secured Financial Solutions, independent insurance advisor investment advisor rep with a fiduciary obligation and in the financial services industry since 1994. A+ rating with the Better Business Bureau for over a decade and a half, members in good standing with the National Association of Insurance and Financial Advisors.
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