2018 Tax Planning | Kevin Rigg

2018 Tax Planning

By Kevin Rigg


As 2018 draws to a close, we want to pass along some tax planning tips and a reminder of upcoming tax-related deadlines. You may recall changes from the 2017 tax law went into effect this year (the highlights are summarized here). This will make year-end planning a bit more complicated this time around.

  1. Fourth quarter tax estimates are due soon. To avoid penalties, be sure to have your payment in the mail no later than January 16th.

  2. Review your pay stubs and, if cash flow allows, make sure to maximize contributions to your tax-qualified accounts before year end (e.g., 401k/403b/401a).

  3. Fill up lower tax brackets with Roth conversion income. Roth conversions must be completed by December 31st and, under the new tax law, can no longer be recharacterized in the following year.

  4. Accelerate state/local tax payments, medical expenses, and/or charitable contributions into 2018. Doing so may help bring your itemized deductions above the new, higher standard deduction ($12,000 for singles and $24,000 for marrieds).

  5. Utilize a Donor Advised Fund to take an immediate tax deduction for current contributions while maintaining the ability to distribute funds to your preferred charity at a later date. These are great tools for accelerating deductions as discussed above.

  6. Use a Qualified Charitable Contribution (QCD) to contribute directly to a charity out of an IRA. A QCD is only available for those subject to a required minimum distribution (RMD). The QCD goes towards fulfilling the RMD and does not have to be reported as income. It is especially beneficial for those who do not itemize their deductions.

There are many other planning opportunities to be aware of this year and some of them are summarized here. At SoundView, we evaluate your personal tax situation each year and let you know if any tax planning strategies should be considered before year-end. We make every effort to coordinate our planning with your tax preparer, both to get their input prior to implementation and to ensure they have everything they need to file complete and accurate returns for you in the coming year.