What Planning Should I Consider Before Year-End?

Many of the methods of minimizing taxes must be completed prior to year end.

Income Taxes – In order for charitable and other expenditures to be included as itemized deductions, they must be remitted prior to December 31. Be aware that many professional fees, including the cost of developing and implementing a trust for estate planning purposes, are deductible for income tax purposes. For this reason, you should try to pay professional fees prior to December 31.

Estate/Gift Taxes – While not deductible for income tax purposes, many individuals regularly make annual exclusion gifts to their children and other descendants, as a method of reducing the size of their estate for federal estate tax purposes. An individual may currently transfer $13,000 per donee, per tax year, without filing a federal gift tax return. Married couples who elect to “split” gifts can give a total of $26,000 per donee per tax year. Gifts must be made prior to year end, and ideally should be completed with certified or guaranteed funds, to avoid problems if the donor dies prior to the check’s being honored by the bank. 

We are available to meet with you to discuss in detail the year-end strategies for minimizing income and estate taxes.