As always, it’s beneficial to begin planning as soon as possible because many strategies will only be effective if put into place before year-end. To assist in this process, our 2016 Year-End Tax Planning Guide is a valuable resource, and it is now available on our website.
It highlights various PATH Act provisions, along with other potential opportunities for lowering individual and business taxes. Some of which include;
- Individual Credits – This guide discusses various tax saving credits such as the Residential Energy Efficient Property (REEP) credit and the American Opportunity Tax Credit. The REEP credit has been extended, with a 30% rate available through 2019. The American Opportunity Tax Credit has been made permanent, with a maximum credit of $2,500 per eligible student per year. These credits, along with many others, can make a big difference on an individual’s tax return for 2016.
- Retirement Planning – Various tools are provided in this guide to help individuals prepare for retirement. For example, required minimum distributions, generally, have to start being taken after you reach 70 and a half years of age. Failure to do so will create a 50% additional excise tax of the amount you should have withdrawn. Knowing these types of details can help you avoid burdensome taxes.
- Timing Strategies – Timing is crucial for businesses, which is why this guide lays out different strategies to take advantage of timing in order to lower taxes. One way to do so is to defer income. Businesses that use the cash method of accounting could defer income by delaying billing notices so that payment won’t be received until early next year. This is just one of the various strategies talked about in our guide.
The tax planning guide can be a great starting point for you, but we strongly suggest that you consult a tax specialist prior to implementing any of the strategies discussed.
For more information on the 2016 Year-End Tax Planning Guide, have a member of the Barnes Dennig team contact you here, or call (513) 241-8313.