It’s Time to Revisit Your Tax Strategy

Is your current tax strategy still working? A review could uncover opportunities for reducing your taxable income. Consider the following areas:


Retirement Savings

  • Can you contribute more this year?
    • Employees’ contributions to 401(k) plans are made with pretax dollars, so your current income and possibly current-year taxes could be reduced.
    • If you are self-employed, a Keogh, SEP, or SIMPLE plan could help you shelter income from taxes.


Potential Deductions

  • Expecting big medical bills? Some deductible items, such as medical expenses, must meet a specific threshold before deductions can be taken. You may be able to time discretionary expenses so that you exceed the threshold one year but not the next.
  • Is it time to give back? Depending on your specific tax picture, charitable donations could provide a good source of income tax deductions.


Specific Situations

  • Collecting social security? You may benefit from strategies to reduce or defer taxable income. If your non-social security income exceeds certain levels, it triggers taxation of a higher percentage of your social security benefits.
  • Planning for capital gains or losses? Determining when to recognize either depends on whether you want to postpone tax liability (by postponing recognition of gains) or recognize capital gains or losses during the current year. If the gains will be subject to a higher tax rate next year because of a change in tax bracket or if you cannot use capital losses to offset capital gains, you may recognize capital gains this year.
  • Have you looked into life insurance? It may provide liquidity to pay estate taxes, and it could be an attractive solution to other liquidity problems, such as family-owned businesses, large real estate holdings, and collectibles. Proceeds can pass free of income and estate taxes when structured properly.


These are just a few tax planning strategies. We can work with you and your tax professional to review your current situation and determine which options may be best for you.



This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to ensure that our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.