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End-of-Year Tax Tips: What are the Pros Saying?

by
TaxBuzz Staff
on
10/31/2017
End-of-Year Tax Tips: What are the Pros Saying?

Today we're discussing frequently asked questions about End-of-Year taxes with industry leaders, tax experts and small business owners and seeing what tips they have for us.

  • What are the best year-end tax planning tips for individuals to save money on their taxes? 
  • For the Gig Economy (ex: Uber and DoorDash), what are the best deductions to help save on taxes? 
  • What are the most common year-end tax planning ideas for small business owners and entrepreneurs? 
  • When does it make sense to defer income into 2018? 
  • What are the best ways for an investor to harvest losses from investments?

These are just a few of the questions the pros discussed and debated in today's chat.

Thank you to everyone who participated! Be sure to check out the highlights of the chat below.

@TaxBuzzOnline will be hosting a #TaxBuzzChat on Twitter the first Wednesday of every month at 10am PT/1pm ET. Our next chat will be Wednesday, December 6th. Don't miss out on the next hot topic!

Q1. What are the best year-end #tax planning tips for individuals to save #money on their #taxes? #TaxBuzzChat pic.twitter.com/DFo8eRfgHg

A1 put as much as you can now into your 401(k) plan. Always wise move; more so now that rules may change under #taxreform #taxbuzzchat

Q1. Pay property taxes in Dec 2017 instead of Jan 2018 if possible. #TaxBuzzChat

A1. prepay the first 2018 installment of property taxes and if the individual is in a state w/ state income tax .. #TaxBuzzChat https://t.co/sRasEmlXa2

A1 (cont) make sure any 2017 state tax liability is paid before the end of the year #TaxBuzzchat https://t.co/sRasEmlXa2

A1. Consider making a state estimated tax payment before 12/31. #TaxBuzzChat

A1. Look at all the tax credits offered by your state. There are some surprisingly easy ones to take advantage of. #TaxBuzzChat

A1. For state income taxes, pay 4th quarter in 2017 to get federal deduction in 2017. #TaxBuzzChat

Oldie but goodie: adjust your withholding, especially if it looks like you'll owe a lot; don't want to face a penalty for underwithholding! #TaxBuzzChat

Q2. For the #GigEconomy (ex: #Uber and #DoorDash), what are the best deductions to help save on taxes? #TaxBuzzChat pic.twitter.com/W8Ww7MVYq6

A2. Drivers need to keep a log of the miles driven between each fare to maximize the deduction for business use of the vehicle #TaxBuzzChat https://t.co/5PCrftOfh1

A2 Keep detailed record of miles driven and auto expenses. #TaxBuzzChat

gig workers, keep good records! IRS looks at folks who don't have 3rd party documentation. Your receipts can save you #TaxBuzzChat

A2. A lot of vehicle expenses can be taken on Schedule C in the #GigEconomy. Home office costs are also a possibility. #TaxBuzzChat

A2: Keep good records if you're self-employed so you can prove your deductions. Receipts, receipts, receipts! #TaxBuzzChat https://t.co/lJumVOTzLS

Liability #insurance on your #vehicle, the costs of your cell phone, and if you purchase water or snacks to provide to guests. #taxbuzzchat

separate bank account and biz credit card good way to keep gig income & expenses distinct from personal ones #TaxBuzzChat

There are several apps available to make it easy to track mileage for business - use them, like MileIQ #TaxBuzzChat

Q3. What are the most common year-end tax planning ideas for #SmallBiz and #Entrepreneurs? #TaxBuzzchat pic.twitter.com/RTZwbVZKiF

A3. Consider fixed asset purchases that qualify for Sec 179 or bonus. #TaxBuzzChat

A3. As long as they are cash basis taxpayers, they should pay as many tax deductible expenses as possible #TaxBuzzChat https://t.co/iSFVbxAdeZ

A3. Review retirement plan contribution options and contribute as much as possible. #TaxBuzzChat

A3 Defer income until future year hopefully a year with a lower tax rate and not to a year with a higher tax bracket #TaxBuzzchat https://t.co/bi2mBVYKI5

Sounds #tax geeky boring, but I review Schedule C + instructions in Nov/Dec to make sure I'm not overlooking something or missing a tax law change #TaxBuzzChat https://t.co/wMq12lqP6H

#TaxbuzzChat - Purchase equipment before the end of the year, most equipment can be expensed and will provide a substantial tax deduction.

Great point! I snail mail December invoices on Dec. 31 to ensure clients get them & issue taxable payments in following year #taxbuzzchat https://t.co/hwIlGM1hup

Much of year-end #tax planning is about timing. Try to match your years of big deductions with more income and vice versa. #TaxBuzzChat

Q6. When does it make sense to defer income into 2018? #Taxes #PersonalFinance #TaxBuzzChat pic.twitter.com/XGjSwFgQU6

A6. If you will have more losses/deductions or be in a lower bracket in 2018, try to defer income to that year. #TaxBuzzChat

When you think/know your tax rate will be lower in 2018. Could be due to tax reform or a change in your work situation #taxbuzzchat https://t.co/MrfHuXd0xA

A6. Job changes or marriage can also affect which year you want your income to be in. #TaxBuzzChat

Q7. What are the best ways for an #investor to harvest losses from #investments? #TaxBuzzchat pic.twitter.com/0DeKVz7YqU

A7 If a taxpayer has stocks that have declined in value, they may wish to sell them before the end of the year #TaxBuzzchat https://t.co/hiqxsgQmWa

A7 (cont) Use the loss to offset other gains for the year or to produce a deductible loss #TaxBuzzChat https://t.co/hiqxsgQmWa

A7. Make sure you actually have losses. Many folks confuse realized losses with declining values. #taxbuzzchathttps://t.co/R38fJZdRaf

#taxbuzzchat One year-end strategy is to review your stock portfolio and sell off losers to offset your gains.

A7. Harvesting losses is good but make sure it fits with your overall strategy and you have recognized cap gains to offset. #TaxBuzzChat

A7 If the taxpayer thinks the loser stocks will rebound they can be repurchased after 30-days & avoid the wash sale rules #TaxBuzzchat https://t.co/hiqxsgQmWa

there's no 30-day wash sale waiting period is you sell a profitable asset; that's just for losing stocks as noted by other #taxbuzzchat tax pros, https://t.co/66E570NzW2

-- Kay Bell (@taxtweet) November 1, 2017

We had a great time chatting with our participants on such a hot topic. End-of-year is right around the corner so feel free to use our #TaxBuzzChat hashtag or tweet us at @taxbuzzonline if you have any additional questions you'd like answered. You can view all the questions and full conversations here.

We'll be hosting #TaxBuzzChat the first Wednesday of every month at 10am PT/12pm ET for our monthly discussion on all things tax and accounting.

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TaxBuzz Staff

TaxBuzz Staff

Our experts cover the hot topics in tax, personal finance and business planning. Follow us on @taxbuzzonline to get the latest updates year round.

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