- Early this month check the amount of 2015 tax you have prepaid through withholding and quarterly estimates. If you’ve underpaid, consider increasing your withholding before year-end. Withholding is considered to have been paid evenly throughout the year. This could prevent your being charged underpayment penalties for 2015.
- Avoid the marriage penalty. If a wedding or divorce is in your plans, be aware that your marital status as of December 31 determines your tax status for the whole year. Changing the dates of a year-end event may save taxes. Even though the tax law provides some relief from the marriage penalty, it has not been completely eliminated.
- Plan for losses. Check your basis in any S corporation in which you are a shareholder and where you expect a loss this year. Be sure you have sufficient basis to enable you to take the loss on your tax return.
- Use this year’s annual gift tax exclusion. If you make annual gifts to family members or others, make sure you complete your gifts for 2015 by December 31.
- December 31 is the deadline for taking a 2015 required minimum distribution from your traditional IRA if you’re 70½ or older. Miss this requirement and a 50% penalty could apply.
The information on this site is general in nature and should not be acted upon in your particular situation without further details and/or professional advice. For assistance, contact our office.