Back To Top

Year-End Tax Planning Tips

As we approach the end of 2017, now is a good time to focus on year-end tax planning ideas that could potentially lower the taxes you pay early next year.  Although tax reform is a real possibility in the near future, at this point, it appears safe to say that any major overall of the tax code will not take effect until after the 2017 tax year.  Given this, there are a number of well-established tax planning strategies that taxpayers can still employ for the 2017 tax year. The following are just a few year-end tax strategies to consider discussing with your tax professional before the new year:tax services

  1. Retirement Planning

Are you currently covered by an employer 401(k) plan?  If so, consider increasing or maximizing your contributions before the end of the year. Taxpayers under age 50 can contribute a maximum of $18,000 to their 401(k) plan this year, while taxpayers over age 50 can contribute up to $24,000.  If you are not covered by an employer 401(k), consider contributions to other types retirement plans, such as a traditional IRA or self-employed retirement plan, all of which have different contribution limits and rules.

If you currently own an IRA (including inherited IRA’s) and are over age 70 ½, make sure you are in compliance with the Required Minimum Distribution (RMD) rules.  If your RMD is not taken by December 31st, you could be subject to a substantial penalty.

  1. Defer Income

Are you in a position to defer income until 2018? If you are due a year-end bonus from work, consider asking your employer to defer payment of the bonus until early 2018.   If you are self-employed, consider delaying your client billings until sometime in early 2018.  If you can afford to postpone the income, you can potentially defer paying taxes on that income for another year.  It is also important to consider your expected 2018 income compared to your expected 2017 income to ensure you are not deferring the income into a higher 2018 tax bracket.  However, if you think you will be in the same or a lower tax bracket next year, deferring income could make sense if you are in a position to do so.

  1. Generate Capital Losses

Has your investment portfolio been having a good year?  Do you have a significant amount of capital gain income for 2017?  If so, consider generating capital losses to offset those capital gains.  If you generate capital losses in excess of capital gains, you can deduct up to $3,000 in 2017, with the rest carried forward to future years.  While this may sound tempting, you should also consider the potential future prospect of each security carefully before selling.  Although you could potentially save on your taxes by generating capital losses, you may lose out on a potential good investment if you sell the investment solely for income tax purposes.

  1. Maximize your Deductions

Have a personal deductible expense that is due early in 2018? Consider paying it early and taking the deduction in 2017. Examples of personal deductible expenses that could be prepaid include charitable contributions, qualified post-secondary education expenses, medical expenses, property tax bills or estimated state income tax payments.

If you own a business, consider certain year-end business expenditures that could help reduce your overall business income.  Common year-end tax savings business expenditures include purchasing capital assets, prepayments of common expenses, employee benefit contributions and owner compensation.

  1. Fiduciary Tax Planning

Trustees and beneficiaries of trusts should consider the potential tax savings from making beneficiary trust distributions.  Based on the trusts current year income and terms of the trust, trusts may be able to distribute some or all of the trusts income to the trust’s beneficiaries, where it can often times be taxed at more favorable tax rates.  Please note that a careful review of the trust’s governing document, the trusts expected income and the beneficiaries tax rates should be done prior to making any distributions to ensure the trust is allowed not only to make the distributions, but also to ensure the distributions will achieve the desired tax saving results.


These are just a few of many potential year-end tax saving opportunities that taxpayers should discuss with their tax professionals before the end of the year. Before employing any of these tax strategies, you should contact your tax professional to ensure you fully understand each strategy and to confirm whether or not the strategy would be beneficial given your circumstances.



Derek is a manager on our tax team and member of the Firm’s Family Wealth team. He specializes in assisting individual and corporate fiduciaries with complex trust/estate tax and compliance related issues. In addition, he excels in providing individuals and business owners with sound tax and business planning, taking into consideration their unique concerns and issues.

Learn more about Derek