Year-End Tax Planning: Part IV
Maximize your contribution to your 401K and/or IRA: Retirement comes all too quickly, Believe me on this. Each year you should maximize your retirement contributions to your 401k and/or IRA. This is particularly true if you have an employer who matches part of your contribution. Surprisingly, 50% of people who have matching contributions don’t take full advantage of this, which is like walking away from free money.
Maximize your contributions to a Flexible Spending Account (FSA) and Health Savings Account (HSA), if these are available to you. If your employer set up a FSA, you should also max out your contribution. If not, and you have a high deductible health policy ($1,350 deductible or more single or $2,700 or more married). You can put away in a HSA $3,450 single or $6,900 family.
If you have a ‘large’ estate, consider instituting a gift giving policy to your children and grandchildren of up to $15,000 per person, per year. Thus, if you have two kids who are each married, you can give $15,000 to each of your kids and to each of their spouses without any gift tax problem.
If you have a business and gross receipts are under $25 million dollars, you can use the cash method of accounting. You might want to consider switching.
The expense limit for equipment and off the shelf software has been increased to $1,000,000 for this year. Thus, if you are considering buying equipment and furniture, this is the year to do it.
All content on this site is the property of Taxbot, LLC and/or the author. You may link to any article that you wish, or share via the social media buttons below. However, please do not copy articles or images for use on other sites without express written permission.