The end of 2018 is coming up quickly and with it should come with thoughts about tax planning strategies. This year may hold new challenges though with the passage of the Tax Cuts and Jobs Act of 2018.

Planning Taxes

As you are deciding on end of year tax planning approaches, you may consider some of the following:

  • Selling investments you may have had gains or losses on
  • If you know that you will have an increase in income through things such as year-end bonuses, try to get them before December 31st.
  • Prepaying deductible expenses (such as charitable contributions or medical expenses) this year using a credit card. Deductions may be taken based on when the expense was charged on the credit card, not when the bill was paid. For example, if you charge a medical expense in December but pay the bill in January, it can be taken as a deduction on your 2018 tax return.
  • Send invoices or bills to clients or customers this year to be paid by the end of December if you are self-employed.
  • If you think you will be considered in a higher tax bracket next year, accelerating income into 2018 is a good idea, especially for taxpayers whose earnings are close to threshold amounts ($200,000 for single filers and $250,000 for married filing jointly) that make them liable for additional Medicare Tax or Net Investment Income Tax. Although, you should caution yourself on one-time spikes in income due to events such as Roth conversions, the sale of your home, etc.
  • Accelerate deductions for the 2019 year. Possibly pay your entire property tax bill, including installments due in the year 2019, by year-end, or pay a state estimated tax installment in December instead of at the January due date.
  • Sign up for health insurance if you haven’t already this year to avoid the penalty that you might incur if not.
  • Contribute to a charitable cause with end of year giving.

If you seek help or have questions about your 2018 taxes, contact a tax consultant in Springfield Missouri. Hiring accounting services in Springfield Missouri may help you get a better handle on your taxes and ease the process. Call Schultz, Wood, and Rapp P.C. for the advice and counsel you need.