The results of the 2016 election forecast a number of potentially significant changes to Federal and State tax policy in 2017.
Indeed, every new administration (whether federal or state) always has its own goals for the tax code and, after winning an election, they have the political capital to put at least some of them into effect. The New Year has the potential to be full of tax law changes at all levels of government and we at Lurie will be here to help you keep up.
In the meantime, however, here are some steps you can take to lower your tax bill for 2016:
- Harvest Capital Losses from Your Investment Account – 2016 was extremely kind to the US stock market and your brokerage accounts are likely to show some realized gains. If you have any unrealized losses now might be the best time to get out of those positions and decrease your tax bill.
- Energy Efficient Residential Property – The tax credit for energy efficient residential property expires at the end of the year. If you’re thinking of making an upgrade, talk to your tax advisor to see if Uncle Sam can help lower the cost.
- Gift Giving – It’s the season for gifts and any gift under $14,000 decreases your potentially taxable estate and doesn’t incur a gift tax liability.
- Review Your Retirement Strategy – there are a plethora of tax incentives for retirement saving, make sure you don’t miss out on them for 2016.
- Lap Your Deductions – As we discuss here, you can pre-pay for recurring deductible expenses before the end of year and maximize the value of each deduction.
These strategies generally produce benefits for most taxpayers but every situation is different. Make sure to talk to your tax advisor before the end of the year to see if there is anything you should be doing to save some money come April 15th.