At this time of year it is very important that you and/ or your team of advisors review your portfolio to ensure you are taking advantage of all opportunities to save and maximize where ever possible. If you can, look to defer income until 2018 and accelerate deductions into 2017. This strategy may be especially valuable if Congress achieves in lowering tax rates next year in exchange for trimming down deductions. Here are a few helpful tips to get you started.
- Try to arrange with your employer (if it is standard practice in your company) to defer year-end bonuses until early 2018.
- Review Flexible Spending Account (FSA) contributions. This would be the time to increase the amount you set aside for next year in your employer’s health flexible spending account or childcare expenses if you set aside too little for this year.
- Consider prepaying anticipated or pledged 2017 charitable contributions before December 31st.
- Accelerate payment for certain taxes such as an estimated state income tax due January 15 or property tax bills due early next year.
- Consider paying all investment management fees, tuition fees, deductible accounting and legal fees, childcare expenses, alimony, and medical expenses by December 31st if you plan on deducting them on your 2017 tax return.