Thrifty Thinking: 10 Tax-Planning To-Dos to Check Off Your List before the End of 2018

With less than one month left in 2018, time is running out to finish your wealth management and tax planning to-dos. Top-rated estate planning law firm McManus & Associates has made your list, but it's time for you to check it twice. McManus & Associates today released “10 Tax-Planning To-Dos to Check Off Your List before the End of 2018” as part of its Educational Focus Series. During a recent conference call with clients, the firm’s Founding Principal and AV-rated Attorney John O. McManus identified actions you can take this month to minimize what you owe to Uncle Sam in the future. Hear McManus’s guidance by going to https://bit.ly/2PacT86.   

10    Tax-Planning To-Dos to Check Off Your List before the End of 2018

1.     FREELY GIVE TO HELP OTHERS LIVE: Make annual exclusion gifts of up to $15,000 for individuals and $30,000 for married couples, per chosen loved one (per married couple).

2.     REAP WHAT YOU’VE SOWED (AND TAKE YOUR LOSSES):Harvest losses to offset capital gains realized in your securities portfolio.

3.     YOUR HEALTH IS YOUR WEALTH: Take advantage of this year’s lower threshold for Medical Expenses.

4.     USE A TAX RATE IN ITS INFANCY: Review your children’s portfolio income for application of the new Kiddie Tax.

5.     GIVE THOUGHT TO GIVING

6.     ROCKET FUEL FOR YOUR INVESTMENT VEHICLES:Establish and fund qualified plan contributions.

7.     TAKE A BREAK TO RECONSIDER BREAK-UPS:

While we always support and encourage harmony and reconciliation, if there must be a decision to legally separate or complete the divorce, you may want to do so before year-end. Otherwise, moving forward, the payer of alimony will no longer get a deduction on his or her tax return, and the recipient will no longer have to include the alimony as taxable income.

8.     DON’T WAIT TO COMPENSATE (YOURSELF):

An owner of an S Corp must pay themselves a reasonable compensation (what someone in a similar job would be paid). Therefore, make sure you pay yourself a salary before year end.

9.     BE BOLD AND REVIEW YOUR WITHHOLDING:

The Tax Act lowered the tax rates and changed the tax bracket income ranges.  Therefore, now is the time to do a “check-up” to see if your current tax withholding will be sufficient for next year’s income.

10.  GET IN THE GROOVE TO MAKE A MOVE: Make distributions of income from trust accounts and estate accounts to lower your income tax liability.

Estates and trusts are taxed at the highest income tax rate (and a lower threshold at which the 3.8% Medicare surtax applies). Therefore, it may make sense to distribute income to the beneficiaries to be taxed at the beneficiary’s lower income tax rate.

For help tackling your year-end tax planning to-dos, call McManus & Associates at 908-898-0100. Learn more about the award-winning firm atwww.mcmanuslegal.com.

About McManus & Associates

Nearly 30 years ago, McManus & Associates was founded to deliver the highest quality estate planning services that the largest firms promise with the more intimate, personalized relationships that a sophisticated boutique law firm can offer. Since that time, some of the most prominent families in finance, media, academia and medicine — both domestic and international — have relied on McManus & Associates to serve as their tax advisory and their advisor in wealth and family mission planning.