11 Reasons Why Year-End Tax Planning Matters

15to16.jpgAs the end of the year draws to a close, it is a great time to consider some planning strategies that can help lower your tax bill. While good tax planning may help save you money, it can also you achieve a variety of other financial goals.

Here are a just a few benefits that year-end tax planning may provide:

  • Planning can help ensure that you have fully funded your retirement accounts, thus helping maximize retirement savings and potentially reducing your taxable income.
  • Strategic acceleration or deferral of income may help lower your current and/or future year’s tax obligation and improve your cash flow.
  • Smart tax planning can help you minimize inheritance or estate taxes and enable you to leave more money to loved ones and/or a favorite charity.
  • Planning may allow you to defer some current taxes to future years, and might even help reduce your future tax obligations.
  • Tax planning helps ensure tax compliance, which reduces or mitigates penalties associated with the underpayment of estimated taxes.
  • The Alternative Minimum Tax may be avoided or mitigated through year-end tax planning.
  • Taxes assessed on capital gains and the increased FICA payroll tax for high earners may be reduced or eliminated with simple planning.
  • Planning may uncover strategies that allow you to maximize certain deductions or credits, which may in turn lower your current or future tax bill.
  • Lowering your current year’s income may make you eligible to contribute to a Roth IRA. Others may benefit from a Roth IRA conversion or the recharacterization of an ill-timed conversion.
  • Adjusting the tax withholding on your salary or bonus may help reduce your tax obligation and improve your cash flow.
  • In short, year-end planning puts you in control, it ensures tax compliance and provides an opportunity to better manage your tax obligation.

As a reminder, not all of these strategies will apply to you and this is not an exhaustive list. To determine the best actions to take based on your specific circumstances, please contact our office at 212.221.7067 to schedule a tax planning analysis.

Jonathan Gassman, CPA/PFS, CFP® CAP®
John Male, CFP®
The Gassman Financial Group
G&G Planning Concepts, Inc.
The Retirement Maven 
9 East 40th Street, Suite 1500
New York, NY 10016
Tel: 212-221-7067 Ext. 17
Fax: 585-625-0830


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