Tax Planning Actions to Be Taken by December 31

The following checklist represents a list of actions that must be taken by the end of the year if a taxpayer wants to take advantage of the opportunity for the current tax year.

This is not blanket advice for everyone, contact us before taking any action so that we can evaluate your individual circumstances!

1. Complete regular tax projection

2. Complete AMT tax projection

3. Make final state and local estimated tax payments (unless in AMT posture) early rather than waiting until January 

4. Consider making January mortgage payment early

5. Ensure all charitable gifts are made before year-end, consider gifting low cost basis, appreciated securities

6. Realize capital gains or losses as appropriate

7. Make family gifts (up to $13,000 per recipient, gift tax-free), try to ensure checks are cashed by year-end

8. Consider additional contributions to 401(k) and other qualified retirement plans or IRAs to maximize allowed deferrals – including catch-up contributions allowed for taxpayers aged 50 years or older by end of year

9. Make contributions to Code Section 529 education savings plans for potential state tax savings and to Coverdell Education Savings Accounts (ESAs) – deadline for Coverdell ESA contributions is April 15

10. Consider making payments toward next years tuition and expenses

11. Ensure medical and dependent care expenses are sufficient to exhaust health and dependent care flexible spending account balances – if not, consider scheduling routine medical, dental, and eye exam appointments

12. Purchase depreciable business equipment (including off-the-shelf computer software) to take advantage of increased expensing allowance

13. Purchase vehicles to be used in trade or business 

14. Amend income tax returns to take advantage of previously forgone bonus depreciation and/or to elect half-year depreciation convention