Plain and Simple: Bright Business Insights Winter 2019 | Page 8

WHEN IT COMES TO TAX PLANNING, START NOW! Important Tax Tips to Help You Save Money With regard to your federal tax bill, it’s never too early to start requirement and won’t be taxable to the individual. Also, qualified strategizing. This is especially true if you want to lower your future charitable distributions provide a valuable tax-saving advantage tax bills. Because of the tax laws that are in effect and how often even if you cannot itemize deductions. regulations change, early-year tax planning is a smart idea. • Use Funds In Your Flexible Spending Account – If you have When you put a plan in place early, you can actually maximize your tax a Flexible Spending Account (FSA), don’t forget to use it! Any savings and focus on other things when the tax deadline comes around unused money left over at the end of the year is taken away. This again next year. Strategizing and mapping out a tax plan allows you only applies if your company doesn’t offer a rollover option or a to get ahead by being properly prepared for anything that may arise grace period to spend your FSA’s funds. during the year. Strategize Your Tax Plan • on to your heirs, you should use your annual gift exclusion to give tax-free during your lifetime. Planning is the name of the game so, throughout this year, think about the beneficial tax moves you could take advantage of that will lower your future tax bills. Below are some tax tips you should consider • businesses can write off 100 percent of fixed asset purchases with either bonus depreciation or the Section 179 expense. Bunch Charitable Contributions – It may be beneficial for you to “bunch” multiple years of donations into one year and limit donations for the following year. Why? By doing this, you will be • • Maximize Deduction For Qualified Business Income – If you have income from S corporations, LLCs, partnerships, trusts, able to itemize deductions in alternating years. • Fixed Assets For Small Business – If fixed assets are placed in service before the end of the year and actively used, many when strategizing your tax plan: • Give Gifts To Heirs – If you are expecting to pass a large estate estates, a sole proprietorship or a non-corporate farm, you may be Give Appreciated Stock To Charity – Donating appreciated eligible for the qualified business income deduction. Owners of stocks to charity has a double benefit. First, it allows you to deduct qualifying entities can receive a 20 percent deduction on qualified the fair market value of the publicly traded stock donated and business income. However, the deduction may be limited to 50 second, you won’t have to recognize the gain. percent of the W-2 wages paid, or the sum of 25 percent of the Donate Required Minimum Distribution To Charity – Once you have reached age 70½, required minimum distributions wages plus 2.5 percent of certain depreciable basis. • Incentive Stock Options – Taxpayers who exercise and retain (RMD) become a part of your reality. However, the IRS allows their incentive stock options (ISO) during a calendar year may you to transfer up to $100,000 per year from your IRA directly have an alternative minimum tax (AMT) issue. If you exercise an to a qualified charity. This distribution will satisfy the RMD ISO in 2019 and the value of the stock has decreased, you may want to consider selling it before the end of the year to reduce the AMT effect. The earlier you begin thinking about your taxes, the better. Remember, a little early tax planning can help you avoid major headaches now and in the future. If you’d like to get started on your tax strategy for the year ahead, give me a call to further discuss your situation. by: Susan Custer, CPA Manager 122 Fourth Street NW P.O. Box 1020 New Philadelphia, OH 44663 330.308. 6809 [email protected]