by Peter D. Prescott CPA, Masters in Taxation

1) Schedule a year-end tax planning meeting to consider the following:

• Reposition your assets to avoid the additional Obamacare taxes on passive income.
• Income shifting to reduce 2016 or 2017 taxes.
• Consider a Roth IRA conversion now to provide you tax planning flexibility.
• Review investment portfolio(s) to harvest tax losses in stocks, bonds or mutual funds.
• Determine 2016 tax liabilities.
• Reduce Alternative Minimum Tax (AMT).

2) Weigh the advantages of incorporation if you are a business owner for tax savings and legal protection. It is a must to schedule a “Choice of Business Entity” meeting to determine the best course of action and the required steps/procedures.

3) Address your “big” financial picture with a holistic planning review that examines and integrates all key aspects of your family’s financial planning – taxes, investments, college planning, retirement, risk protection, business and estate. Understanding the specifics of each key area utilizing cutting edge tools and techniques is invaluable. Finding ways to synergistically incorporate various wealth management solutions gives you the broadest range of flexibility, security and control moving into the future. Year-end is a superb time to do so as it may unearth current year tax savings at the same time.

4) Schedule a pension review meeting to take advantage of the best tax deduction available and:

• Set up your pension plan prior to 12/31/2016. Many plans need to be established prior to year-end; however contribution calculation and funding may be delayed to the extended due date of the return (September or October of 2017). This provide you with the flexibility to reduce your tax bill late into 2017.
• Review how your pension account is allocated, including the potential risks of higher interest rates.
• Determine if you should be investing in your retirement plan on a tax-deductible basis or on an after-tax basis (Roth). This is based upon your tax bracket.
• Set up a pension plan that has a loan capacity of $50,000 per participant.

5) Review your health insurance coverage during open enrollment season. In particular, obtain quotes for alternative plans that can take advantage of Health Savings Accounts (H.S.A) which can allow you to deduct out-of-pocket medical costs.

6) Consider hiring family members (children/spouse) if you are a sole proprietor or corporation. Significant tax savings can be achieved including establishing a medical reimbursement plan and pension contributions.

7) Asses the benefits of purchasing business equipment and cars prior to year-end to take advantage of depreciation.

8) Schedule an insurance update analysis to make sure you have adequate life insurance coverage and finalize your decision to purchase long-term coverage.