Now is an opportune time to review your current tax situation

As 2019 comes to a close, now is an opportune time to review the current tax situations for both individuals and businesses alike. It is our goal to ensure that our clients are aware of, and take full advantage of any beneficial tax strategies and opportunities available, and to begin next year’s planning process as well.

With so many changes made to tax law with the signing of the Tax Cuts and Jobs Act (TCJA), and with many additional changes undoubtedly on the way, we would like to take this opportunity to keep you up to date on some key considerations we have found to have the largest impact on our clientele:

Individuals:

• Deductions - With the increase in the standard deduction, many taxpayers who itemized in the past may not benefit from doing so in the future. This has created the strategy of lumping deductions (i.e. charitable contributions) into a single year in order to receive the most benefit.
• Withholdings - Many taxpayers found that under the new tax regime, their total withholdings at year end either resulted in a larger refund or liability than in years past. With proper planning, any potential penalties for underpayment, or interest-free loans to the federal government, can be avoided.
• Kiddie Tax - Tax on children’s investment income is now calculated at the trust and estate tax rates. Depending on the category of income and type of tax return filed, their total liability can potentially be mitigated.
• Opportunity Zones - This is a strategy for deferring tax on realized capital gains, up to 15%. In order to take full advantage of this new incentive, you must invest your capital gains before December 31st, 2019! For more detailed information please see our related post.