Individual income taxes, whether paid through employer withholding or quarterly estimates, are probably one of your largest annual expenditures. So, just as you would shop around for the best price for food, clothing, or merchandise, you want to consider opportunities to reduce or defer your annual tax obligation. This Tax Letter is intended to assist you in that effort.
Your 2017 year-end tax planning begins with a projection of your estimated income, deductions, and tax liability for 2017 and 2018. You should review actual amounts from 2016 to assist you with these projections. To the extent you can control the timing of income and deductions between 2017 and 2018, you should make decisions that will result in the lowest overall tax for both years. If shifting income and deductions between 2017 and 2018 does not reduce your overall tax liability, you should try to defer as much tax liability as possible from 2017 to 2018.
Tax planning for individuals also requires consideration of the tax consequences to any business conducted directly or indirectly by the individual owners. Accordingly, we suggest you also review our Tax Letter entitled Year-End Tax Planning for Businesses. In light of the legislative changes to the tax code that are pending as of the publication of the letter, we also suggest that you check our website for any updates to the proposed tax reform discussed in the PDF linked below.