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Tax tips for end of year

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Feb 5, 2003
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curt fowler

Curt Fowler






I don’t know about you but once Halloween gets here the rest of the year seems to evaporate at light speed.
I want it to slow down, to savor the fall season and time with family and friends. But, the next thing you know a new year is here!
For lots of us, this season can be a time of planning to make the upcoming year better than the last. That can be strategic planning for your business and family – creating plans to make the future just a little brighter.

One part of this planning is wrapping up our business and personal financial tasks for the year. This is the time to do some planning and make some moves to minimize your tax bill. Here are some ideas to consider for your business and personally.

Tips For Individuals
Manage Your Adjusted Gross Income:
Your AGI is the government’s go-to number to determine who qualifies for specific tax perks and how much you pay for things like Medicare. You can bring your AGI down by deferring receipt of income, maximizing your retirement savings and contributions to health savings accounts, and tax-loss harvesting. Know the AGI limits on the tax breaks you want to qualify for and manage your AGI accordingly.
Charitable Deductions: The 2022 standard deduction for married taxpayers is $25,900, $12,950 for singles and $19,400 for heads of household. The cap on state, local and real estate taxes you can take as itemized deductions is $10,000. These two facts mean that a much smaller percentage of the population will itemize their taxes every year. If you are a giver to charities, bunching your charitable contributions may allow you to itemize in high-giving years and take the standard deduction in lower-giving years.
– You could use a Donor Advised Fund to bunch your charitable giving. A DAF allows you to make your contribution in one year (and take the deduction in that year) while deferring the timing of the donations to the charity.
– To count on your 2022 taxes, checks to the charity of your choice must be in the mail by year-end. Contributions made on credit cards can be taken in the year you contribute.
– It does not matter when you pay the credit card bill.
– If you can, donate appreciated property to charities. In most cases, you can deduct the full value and you nor the charity pay taxes on the appreciation.
– Don’t donate property that has declined in value since you acquired it. You’ll waste the capital loss that way. You are better off selling the asset, claiming the capital loss and then donating the proceeds.
Qualified Charitable Distributions: QCDs are a great way to get money to your charities from your IRA account. You won’t get a charitable deduction for the contributions but you won’t pay taxes on the distributions either. Using a QCD could allow you to give to the charities of your choice, avoid taxes on qualified plan distributions, reduce your AGI and still take the generous standard deduction on your tax return.
Annual Gift Tax Exclusion: You can give $16,000 to each person without having to tap into your lifetime estate and gift tax exemption, pay gift taxes or file a gift tax return. You and your spouse can each give $16,000 per person.

Help With College Education Expenses: Pay directly to the school on behalf of the student. This will not count toward your $16,000 gift tax exclusion.
Contribute to a 529 Plan: Georgia allows married couples to deduct up to $8,000 of contributions per year, per beneficiary from your state taxable income. Contributions are due by April 15 to be deductible for the prior year.
Mutual Funds: Be wary of buying mutual funds in your taxable portfolio at the end of the year. If the fund pays a dividend at the end of the year, you’ll have to pay tax on it and the fund’s share price will decrease by the amount of the dividend. Not fun!
Tips For Businesses
Asset Purchases:
100% bonus depreciation is still available in 2022 but will drop to 80% in 2023. Sec. 179 expensing is also available for up to $1,080,000 of purchases. If you need to make big purchases, making them before the end of the year could accelerate your tax benefit.
Shift Income & Expenses: Cash-basis taxpayers can postpone year-end billings and pay a reasonable amount of expenses early.
Change in Accounting Method: If you are an accrual basis taxpayer with under $25 million of gross receipts, you may qualify to change to the cash basis. This would open up more opportunities to defer taxes.
Pay Pass-Through-Entity taxes at the entity level. Georgia is one of many states that will allow you to elect to pay PTE taxes at the entity level. If you itemize, you will lose the deduction on your taxes but reduce your income because your PTE passes through income after it pays the state taxes.


We couldn’t cover everything in this article but I hope this gives you some great ideas to discuss with your tax advisor.


Curt is a syndicated business writer, speaker and business advisor. He has an MBA in strategy and entrepreneurship from the Kellogg School, is a CPA and a pretty good guy as defined by his wife and five children. (Number six coming December 2022!)
 



curt fowler

Curt Fowler






I don’t know about you but once Halloween gets here the rest of the year seems to evaporate at light speed.
I want it to slow down, to savor the fall season and time with family and friends. But, the next thing you know a new year is here!
For lots of us, this season can be a time of planning to make the upcoming year better than the last. That can be strategic planning for your business and family – creating plans to make the future just a little brighter.

One part of this planning is wrapping up our business and personal financial tasks for the year. This is the time to do some planning and make some moves to minimize your tax bill. Here are some ideas to consider for your business and personally.

Tips For Individuals
Manage Your Adjusted Gross Income:
Your AGI is the government’s go-to number to determine who qualifies for specific tax perks and how much you pay for things like Medicare. You can bring your AGI down by deferring receipt of income, maximizing your retirement savings and contributions to health savings accounts, and tax-loss harvesting. Know the AGI limits on the tax breaks you want to qualify for and manage your AGI accordingly.
Charitable Deductions: The 2022 standard deduction for married taxpayers is $25,900, $12,950 for singles and $19,400 for heads of household. The cap on state, local and real estate taxes you can take as itemized deductions is $10,000. These two facts mean that a much smaller percentage of the population will itemize their taxes every year. If you are a giver to charities, bunching your charitable contributions may allow you to itemize in high-giving years and take the standard deduction in lower-giving years.
– You could use a Donor Advised Fund to bunch your charitable giving. A DAF allows you to make your contribution in one year (and take the deduction in that year) while deferring the timing of the donations to the charity.
– To count on your 2022 taxes, checks to the charity of your choice must be in the mail by year-end. Contributions made on credit cards can be taken in the year you contribute.
– It does not matter when you pay the credit card bill.
– If you can, donate appreciated property to charities. In most cases, you can deduct the full value and you nor the charity pay taxes on the appreciation.
– Don’t donate property that has declined in value since you acquired it. You’ll waste the capital loss that way. You are better off selling the asset, claiming the capital loss and then donating the proceeds.
Qualified Charitable Distributions: QCDs are a great way to get money to your charities from your IRA account. You won’t get a charitable deduction for the contributions but you won’t pay taxes on the distributions either. Using a QCD could allow you to give to the charities of your choice, avoid taxes on qualified plan distributions, reduce your AGI and still take the generous standard deduction on your tax return.
Annual Gift Tax Exclusion: You can give $16,000 to each person without having to tap into your lifetime estate and gift tax exemption, pay gift taxes or file a gift tax return. You and your spouse can each give $16,000 per person.

Help With College Education Expenses: Pay directly to the school on behalf of the student. This will not count toward your $16,000 gift tax exclusion.
Contribute to a 529 Plan: Georgia allows married couples to deduct up to $8,000 of contributions per year, per beneficiary from your state taxable income. Contributions are due by April 15 to be deductible for the prior year.
Mutual Funds: Be wary of buying mutual funds in your taxable portfolio at the end of the year. If the fund pays a dividend at the end of the year, you’ll have to pay tax on it and the fund’s share price will decrease by the amount of the dividend. Not fun!
Tips For Businesses
Asset Purchases:
100% bonus depreciation is still available in 2022 but will drop to 80% in 2023. Sec. 179 expensing is also available for up to $1,080,000 of purchases. If you need to make big purchases, making them before the end of the year could accelerate your tax benefit.
Shift Income & Expenses: Cash-basis taxpayers can postpone year-end billings and pay a reasonable amount of expenses early.
Change in Accounting Method: If you are an accrual basis taxpayer with under $25 million of gross receipts, you may qualify to change to the cash basis. This would open up more opportunities to defer taxes.
Pay Pass-Through-Entity taxes at the entity level. Georgia is one of many states that will allow you to elect to pay PTE taxes at the entity level. If you itemize, you will lose the deduction on your taxes but reduce your income because your PTE passes through income after it pays the state taxes.


We couldn’t cover everything in this article but I hope this gives you some great ideas to discuss with your tax advisor.


Curt is a syndicated business writer, speaker and business advisor. He has an MBA in strategy and entrepreneurship from the Kellogg School, is a CPA and a pretty good guy as defined by his wife and five children. (Number six coming December 2022!)
could you please email me at harr9557@bellsouth.net. ty
 
could you please email me at harr9557@bellsouth.net. ty
I just made $50 selling your email address.................

Just joking but seriously, use the direct conversation to provide any personal info my friend.

You'd be amazed at what hackers can do these days especially if this your primary email.
 
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