As the end of another year approaches, it’s time to start thinking about ideas which may help lower your tax bill. When discussing ideas and tips with your tax advisor, it’s wise to remember a few things:This year’s tax planning might be less exact than in past years, as everyone is still working on understanding the intricacies of the tax law enacted in December 2017;Year-end tax planning can go beyond just reducing this year’s tax bill, it can include looking into future years as well;Planning...
Flow-through planning. The activities, income, and deductions of partnerships, S corporations, and sole proprietorships flow through to their owners and impact the owners’ individual tax returns. In addition to planning related to incurring expenses or deferring income, the new tax law creates a new deduction for certain qualified business income (“QBI”) from a pass-through business.
Consider implementing gift and estate planning strategies to transfer wealth to younger generations while minimizing transfer taxes.Annual exclusion gifts. The tried and true strategy of making maximum annual exclusion gifts still constitutes good planning. For 2018, a donor can give $15,000 per donee, or $30,000 per donee from a married couple.