Still Time to Make These Tax-Saving Moves – Action you can take before time runs out

Still Time to Make These Tax-Saving Moves – Action you can take before time runs out

Five last-minute tax savings ideas

Still Time to Make These Tax-Saving Moves

Here are five tax saving ideas that can be used by most taxpayers. But act soon, there are only a few months until our tax year comes to an end.

1 Make a late-year charitable donation. Even better, make the donation with appreciated stock you have owned over one year. You can often receive the higher value donation without paying capital gain taxes.
2 Make final contributions to your qualified retirement plan AND take any required minimum distributions from your retirement accounts. The penalty for not taking minimum distributions can be high.
3 Take any final investment gains and losses. Capital losses can be used to net against your capital gains. You can also take up to $3,000 of capital losses in excess of capital gains each year and use it to lower your ordinary income.
4 Gather up non-cash items for donation, document the items, and give those items in good or better condition to your favorite charity. You should receive an acknowledgement from the charity and take a photo of the items donated.
5 Consider making any final gifts to dependents. You may provide gifts of up to $14,000 per year. Remember all gifts given (birthday, holiday and cash) count towards this total. This can provide a future source of possible investment income for your kids. While the “kiddie tax” may require applying your tax rate to your children’s earnings, there is an amount of unearned income ($2,100 in 2016) that is taxed at your child’s tax rate.