Your Money Matters: Year end tax tips from Cliff Morgan

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Cliff Morgan

Strategic Wealth Inc.
25011 Calumet Avenue, Suite D
Valparaiso, IN
Toll free: (855) 660-1099

141 Jackson Blvd. Suite 1340 A
(312) 264-4349


Schedule a meeting with your financial planner or accountant.
The end of 2016 is a good time for a financial checkup. A financial planner can take a look at where you are now, the direction you are going and help you decide if it's time to defer income, make more investments or stay right where you are.

Donate to charity.
December 31 is the deadline for charitable contributions you plan to deduct from your 2016 tax return. Instead of donating cash, some people donate appreciating risks, such as low-basis stocks or mutual funds to avoid capital gains tax.

Max out retirement contributions.
You have until you file your tax return next spring to make a 2016 contribution to an individual retirement account (IRA), but 401(k) contributions are only deductible when made in the same calendar year.

Use up FSA money.
If you still have money set aside in a flexible spending account, see if you can order new glasses or schedule that dental work you've been putting off. Some companies offer a grace period into the spring or a $500 FSA carry-over from one year to the next. Be sure to know where you are and deadlines to take advantage of your benefits.

Check your beneficiaries.
You can check the beneficiaries on your retirement accounts or insurance policies at any time, but it's a good idea to do this at least annually.

Take your required minimum distributions.
In the year following the year you reach age 70 ½, you must take minimum required divisions from your IRA by April 1. The penalty for failing to take RMD is a 50 percent tax on what should have been withdrawn, so "make sure if you're 70 ½ that you calculate and take the appropriate RMD for the year.

Defer income and accelerate expenses.
Income that arrives in 2016 is taxable in 2016, so in some instances, it might make sense to delay that income to delay the tax bill.

Maximize your gift allowance.
Those who are likely to leave an estate large enough to incur estate taxes might consider maxing out their gift allowance, which is $14,000 per person per year (meaning a couple can gift up to $28,000 per year to as many people as they want). There is no carry-over of gift allowances from year to year so gifts need to be made on or before Dec. 31.

Conservation partnerships.
These were introduced Conservation Easement was created in 1980 by Ronald Reagan and made permanent by Barack Obama in 2015 under the PATH Act. The government raised the deduction a donor can take for donating a conservation easement to 50%, from 30%, of his or her annual income; they also extended the carry-forward period for a donor to take a tax deduction for a conservation agreement to 15 years from 5 years; and allow qualifying farmers and ranchers to deduct up to 100% of their income, increased from 50%.

The Solar Investment Tax Credit.
This helps support the deployment of solar energy in the United States. This provides business certainty to project developers and investors. This  is one of the most important federal policy mechanisms to support the deployment of solar energy in the United States. The ITC is a 30 percent tax credit for solar systems on residential and commercial.

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