With a new administration taking shape in our nation’s capital after the elections, you can expect that significant tax reforms will be debated, and perhaps enacted, in the near future. But the greatest impact on year-end tax planning in 2016 will likely derive from what happened late last year, not what will happen next year. (If you are interested in potential tax reforms, you might also read our Post Election Tax Update.)

In the waning days of 2015, Congress passed the Protecting Americans from Tax Hikes (PATH) Act, which was promptly signed into law. This new federal legislation reinstated dozens of favorable tax provisions that had expired, many of them retroactive to the beginning of 2015. In some cases, the new law made often-extended tax breaks permanent, with certain modifications. The changes included in the PATH Act provide both individual and business taxpayers with a clearer picture about the optimal tax moves to make before the end of this year.

Furthermore, other developments occurring the last few years—such as a series of new cases, rulings and IRS regulations—could affect your year-end tax decisions. Finally, you might be able to benefit from various other tax-saving opportunities previously written into the Internal Revenue Code.

Keeping all that in mind, we have prepared the following 2016 Year-End Tax Planning Letter.

As 2016 comes to a close, income and deductions for the year become apparent. The last month provides an opportunity to review your individual and business situations and apply the strategies listed below to minimize income tax. Generally, income tax planning involves deferring income to a later year and accelerating deductible expenditures into the current year.  Listed below are a number of specific strategies that can assist in lowering your income tax liability for 2016.

Click to download and/or print the JamisonMoneyFarmer 2016 Year-End Tax Planning Letter.

Topics include:

 

Tax planning is an ongoing process. Your tax picture can change – sometimes dramatically – during the course of a year, and you need to react accordingly. Implementing thoughtful year-end strategies now may help you lessen the taxes you face in April 2017.

One final thought: Saving taxes is generally a good strategy. But making a bad business, investment or personal decision just to save some tax dollars is never a good strategy.

Although this letter has covered a number of topics, it undoubtedly did not address every issue relating to your specific situation. Our tax advisers are here to offer guidance through the complex maze that is the U.S. tax system and suggest strategies to minimize your tax liability.  If you have any questions, please do not hesitate to call your JMF adviser.

 

Click to download and/or print the JamisonMoneyFarmer 2016 Year-End Tax Planning Letter.