tax planning

Top 10 Year-End Tax Planning Tasks

Based on President-Elect Trump’s pre-election tax platform, an iimediate to-do list with annual estate planning opportunities and strategies

NEW YORK, NY, November 23, 2016 /Marketwired/ – In light of Donald Trump’s election and his pre-election platform to reduce marginal income tax rates, there are several planning strategies that should be considered as part of your year-end planning.

McManus & Associates, a top-rated estate planning law firm with offices in New York and New Jersey, today issued the “Top 10 Tax Planning Tasks to Complete before the End of 2016,” as part of its Educational Focus Series. To hear the firm’s Founding Principal and AV-rated Attorney John O. McManus share insight on year-end tax and estate planning strategies, go here.

“The result of this year’s election presents major opportunities for reducing your check to Uncle Sam for tax year 2016,” explained McManus. “Think ahead now and adjust your money management course to protect the wealth you’re working hard to build.”

Top 10 Tax Planning Tasks to Complete before the End of 2016

1. Accelerate your income tax deductions

Pay your January estimated taxes in December. Make your January mortgage payment in December. Make your 2017 charitable donations in 2016.

2. Postpone receipt of income

For cash-basis taxpayers, delay year-end billings. Defer payment of dividends from your C corporation until 2017. If possible, contribute additional funds to your retirement plans.

3. Do not buy any capital assets this year

Under Trump’s proposal, a business will be able to expense the entire purchase.

4. Make gifts to charities and family foundations with appreciated assets

a. Consider gifting low-basis stock instead of selling it to raise cash for gifting that could lead to gains.

b. Determine liquidity needs in the foundation to meet the requirement to pay 5% of the value of a foundation’s net investment assets.

c. Fund a charitable remainder trust with concentrated positions in appreciated securities in order to diversify without adverse tax consequences associated with selling appreciated securities.

The result of this year's election presents major opportunities for reducing your check to Uncle Sam for tax year 2016.

5. Harvest losses to offset capital gains

Be aware of the capital gains that may be distributed to you from your mutual funds near the end of the year. Take advantage of those securities that are experiencing a loss, using the tax savings to offset your gains.

6. Establish and fund qualified plans

Consider making a gift of up to $5,500 to either a traditional or Roth IRA for your children or grandchildren who are not funding their own IRAs, but have enough earned income to report.

7. Identify assets and amounts to make proper GRAT distributions before April 17, 2017

If the annuity payment date is tied to the end of the trust’s taxable year, the payment must be made no later than the date the trust’s income tax return is due.

8. Make annual exclusion gifts to chosen loved ones of $28,000 (per married couple).

a. Make gifts into trusts for children and/or grandchildren.

b. Continue gifting to trusts and contribute to 529 Plans, which grow free of income tax.

c. Make unlimited gifts directly to educational institutions and medical facilities.

9. Make distributions of income from trust accounts and estate accounts to lower the income tax liability

Estates and trusts are taxed at the highest income tax rate (and a lower threshold at which the 3.8% Medicare surtax applies); therefore, it may make sense to distribute income to the beneficiaries to be taxed at the beneficiary’s lower income tax rate.

10. Host annual meetings for your family office, partnerships and foundations

Discuss and plan for your family mission, family business interests and family donation patterns. Document and create minutes for all of the meetings.

For trusted advice on year-end giving and tax strategies, call McManus & Associates at 908-898-0100. To learn more about the award-winning firm, go here.




About McManus & Associates
Nearly 25 years ago, McManus & Associates was founded to deliver the highest quality estate planning services that the largest firms promise with the more intimate, personalized relationships that a boutique firm can offer. Since that time, some of the most prominent families in finance, media, academia and medicine — both domestic and international — have relied on the firm to serve as their advisor in wealth and family mission planning.