New-Year Tax Planning. . . Begin to Plan Now to Reduce Taxes for 2015
— Kevin B. Perlberg, CFP®
While most tax-planning articles are published at year end, we realize that it is beneficial to taxpayers to begin their planning as early as possible. We offer a number of suggested actions you can take at the beginning of this year that can reduce your tax burden. For example, consider tax deductions for:
- Medical liability insurance;
- Retirement plans;
- Health insurance;
- Other employer-provided benefits for employees, employee wages, and employment taxes.
- You can take steps now to accelerate deductions for this year and defer earnings to next year.
- If you expect to sell an asset for a gain in 2015, consider postponing the sale until January 2016 and avoid the tax in 2015.
- Two of the most effective tax-saving vehicles we have used with our clients who own their businesses are to combine and maximize contributions to defined benefit plans (DBPs) and defined contribution plans.
It may seem like a strange time to think about taxes, but we know that you can benefit significantly by beginning to make tax decisions early in the year. Step one is to make a date with your advisory team. Start to discuss your tax options as soon as you can.
You probably noticed that we just said advisory team. We recommend the team approach because of the complexity of the decisions that clients face. We believe strongly that planning should be conducted through a collaboration between the client and a team of financial specialists. The client can meet with the team at regular intervals and chart the best course of action for the year.
The essential first step is that you set up a meeting with your financial advisor. Once you get the ball rolling, the advisor can connect with your advisory team and you can begin this year’s planning in earnest.