The clock is ticking down to 2018, but you still have a few weeks left to make some last-minute tax moves. Take a look at these five tips to help you save a little more this year.
1. Check the amount of 2017 tax you have prepaid through withholding and quarterly estimates
If you’ve underpaid, consider increasing your withholding before year-end. Withholding is considered to have been paid evenly throughout the year.
This helps prevent you from being charged underpayment penalties for 2017.
2. Make sure you have the correct tax status
If you got married or divorced this year, your marital status as of December 31, 2017 determines your tax status for the whole year.
If you’re in the process of a marital status change, altering the dates of a year-end event to the new year may affect your taxes.
3. Plan for losses
Check your basis in any S corporation in which you are a shareholder and where you expect a loss this year.
Be sure you have sufficient basis to enable you to take the loss on your tax return.
4. Use this year’s annual gift tax exclusion
If you make annual gifts to family members or others, make sure you complete your gifts for 2017 by December 31.
5. Consider equipment purchases before December 31
Taxpayers must usually deduct the cost of business property over several years. The Section 179 election allows taxpayers to expense up to $510,000 of new and used property purchased and put into service in 2017.
Property such as machinery, equipment, and furnishings usually qualify. Be careful with special rules that apply to vehicles and personal computers.
Have questions about year-end tax prep? Let’s talk!