The latest Thomson Reuters Checkpoint report provides tax planning tips to help individuals and businesses reduce taxes for 2016 and beyond. Factors that compound the planning challenge this year include political and economic uncertainty, and Congress's failure to act on a number of important tax breaks that will expire at the end of 2016.
The report provides an in-depth analysis of a variety of tax scenarios and approaches for individuals and businesses that could potentially lower their 2016 tax bills. It coversusing a de minimis safe harbor election to expense qualifying business assets; taking advantage of the generous Code Sec. 179 expensing limit and 50% first-year bonus depreciation; year-end moves to reduce or eliminate the 3.8% surtax on net investment income; making the best tax use of stock market losses; converting traditional IRAs to Roth IRAs; and IRA recharacterization and reconversion strategies.
“Year-end tax planning doesn’t occur in a vacuum. Year-end is an opportune time to reconsider conventional tax moves in favor of those that reflect the current economic climate,” said Thomas Long, senior tax analyst with the Thomson Reuters Tax & Accounting business and one of the authors of the report. “However, planning must take into account each taxpayer’s particular situation and planning goals with the aim of legally minimizing taxes to the greatest extent possible.”
The report highlights some of the concerns facing higher-earning individuals and married couples filing jointly or separately. The report also provides checklists of actions that can cut taxes for businesses and individuals.
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