Five year-end tips taxpayers should consider:
1) Review your stock options: Don't overlook your options or option shares when you do your year-end tax planning. There may be opportunities to avoid or minimize regular income tax or alternative minimum tax (AMT) by taking action this year.
2) Fully fund your workplace 401(k) account: For 2016, your 401(k) plan may allow you to save up to $18,000 of your salary ($24,000 if you will be at least 50 by year-end) on a pretax basis.
3) Make year-end charitable gifts: With the tax proposals from the incoming administration that could cap deductions and lower rates, high net worth individuals could find the benefits of certain tax deductions will be higher this year than they'll ever be again.
4) Use your capital losses: If you had capital gains this year, consider offsetting those gains by selling property in which you have unrealized capital losses.
5) Adjust tax withholdings: By increasing your withholdings near the end of the current year, you can avoid penalties that would otherwise have been imposed due to an underpayment of taxes earlier in the year.
The EY Tax Guide 2017 contains these tips and more that taxpayers should focus on before ringing in the New Year. Visit www.ey.com/EYTaxGuide for more tips, suggestions and email alerts for information on up-to-the-minute tax law changes as they happen.
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This news release has been issued by Ernst & Young LLP, member firm of EY serving clients in the US.
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