A year-end approaches, this is a good time to think about planning moves that may help lower your tax bill for this year and possibly next.
New tax rules have been enacted to help mitigate the financial impact of the COVID-19 pandemic, some of which should be considered as part of this years’ planning, most notably elimination of required retirement plan distributions, and liberalized charitable deduction rules..
For individuals, major tax changes from recent years generally remain in place, including lower income tax rates, larger standard deductions, limited itemized deductions, elimination of personal exemptions, an increased child tax credit, and a lessened alternative minimum tax (AMT).
Businesses can take advantage of prior changes, such as a major reduction in the corporate tax rate and elimination of the corporate AMT, limits on interest deductions, and generous expensing and depreciation rules for businesses. Non-corporate taxpayers with income from pass-through entities may be entitled to a valuable deduction.
The time-tested approach of deferring income and accelerating deductions to minimize taxes still works for many taxpayers, as does the bunching of expenses into this year or next to avoid restrictions and maximize deductions.
We have compiled a list of actions for individuals and businesses that may help you save tax dollars if you act before year-end. Not all actions will apply in your particular situation, but you (or a family member) will likely benefit from many of them.
We can narrow down the specific actions that you can take once we meet with you to tailor a particular plan.
