It’s Never too Early to Plan

A couple of planning “gems” to pass along from the plethora of great financial news reporting* on the new Tax Plan.

Tax Planning

  • Use the Roth 401k whenever it is available at your employer or your company (there are NO income limits for a worker to contribute to a Roth 401k, unlike a Roth IRA).
  • For those of you doing Charitable Gifting AND because of the new, higher Standard Deduction that you may consider using instead of itemizing your taxes, consider doing your Charitable Gifting every OTHER year. This, in effect, “bunches” (to use Greg Iacurci’s word) your charitable gifting into LARGER amounts and then you may only need to itemize in years when your charitable gifting plus deductions is MORE THAN $24,000 for married couples ($12,000 for Single filers).

  • In terms of major Medical Expenses (those that come to over 7.5% of your Adjusted Gross Income) consider – if possible – having procedures done in 2018.  Because in 2019 and beyond you will need to spend over 10% (up from 7.5%) of your AGI to deduct medical expenses.
  • Finally, for major gifts to family – gifts over $5 million (this could include a business or business assets) – think about making these gifts in the next couple of years before the limit on gifts becomes lower or “sunsets.” This gift can also remove the future appreciation of the asset from your estate.

Run ALL of these strategies by your CPA and your Estate Attorney.** There are tidbits of strategy coming out literally every day.  These will likely not help reduce your 2017 taxes BUT it is never too early to start planning for 2018 and beyond.  

*Source (subscription only): Greg Iacurci, InvestmentNews. “Tax reform: 7 essential strategies for financial advisers”.

** We do not give tax or legal advice.


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