Year end tax planning checklist for individual taxpayers

Year-end tax planning checklist for individual taxpayers

  1. Retirement distributions and contributions: Plan your final contributions to employer-sponsored 401k plans, retirement contributions to Roth, Traditional IRA.
  2. Contributions to Health savings accounts: You can contribute up to $6,750 per family and $3,400 for self-only. If you are 55 or older as of December 31, 2017, you may be eligible for another $1,000.
  3. Dependent care forms: Complete/request the necessary forms with your child’s daycare or caregiver to be eligible for the dependent care credit for children under 12 years of age. The eligible tax credit is $3,000 per eligible child
  4. Manage your investment portfolio: Review your investment portfolio, rebalance and manage your investments.
  5. Capital gains & losses: Capital losses can be used to offset capital gains. You can also take up to $3,000 of capital losses to lower your taxable ordinary income.
  6. Sale of real estate property/rental property: Ensure you have a copy of the final sale agreement & any other expenses related to the sale of real estate property.
  7. Gifts to dependents and others: You can give up to $14,000 per year per individual to as many people as you wish and the amount increases to up to $28,000 if you and spouse both make gifts.
    1. Exception: There are special rules that may apply to parents shifting taxable investments to children or full-time students under age of 19. Check with a tax professional for more details.
  8. Pay college tuition early: If you have dependents in college, you can pay your January tuition in December. As per the American opportunity credit, parents can deduct 100% of the first $2,000 and 25% of the next $2,000 with a maximum annual limit of $2,500. This applies to each eligible student.
  9. 529 contributions: Make contributions to your children’s 529 plan.
  10. Defer income: If you are a W2 employee, you can ask for the year-end bonus to be deferred to January instead of December. Same with Self-employed income, some of the invoicing work may be deferred if work was completed towards the end of the year.
  11. Request 1099-MISC, DIV and INT. Confirm the total amount, your ID number etc. with your customers/services providers to ensure they provide you the correct 1099 forms timely for the January 31st, 2018 deadline.
  12. Request W2s: If you worked part-time with an employer or partially employed during the year, discuss with payroll departments of your past employers and request W2s.
  13. Charity: Track all your receipts and gifts to charity both non-cash and cash contribution

Posted In: Tax

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