Year End: Tax Planning

To demystify year end tax planning we offer the following suggestions:

1. Figure our your income and deductions.
This is one of the most fundamental and basic steps in year end tax planning.  By determining how much income and deductions you have, you can consider the next basic steps.

2. Postpone or defer income.
If your income is projected to be high, then consider postponing a bonus or deferring income into the next tax year.

3. Pay deductible expenses at year end.
Pay any state or real estate taxes at year end because those are deductible expenses.  Make an extra mortgage payment because the interest is deductible.

4. Give to charity.
Keep in mind that charity typically represents your biggest opportunity for deduction.  Under IRS rules, you are allowed to deduct up to 50% of your adjusted gross income (AGI), which means if you make $200,000, you can deduct up to $100,000 of charitable gifts.

5.  Give to charity with capital assets.
When giving to charity at year end, consider using capital assets such as publicly traded stock, real estate, business interests (LLC, LLP, C corp, even S corp).  By using these kinds of assets, you avoid capital gains tax and you are not pulling cash out of your pocket.  Under IRS rules, you are allowed to deduct up to 30% of AGI using capital assets.

6. Give to charity with non-cash assets.
One of the overlooked charitable deduction opportunities is through non cash assets.  This may mean donating vehicles, boats, RVs, gold, silver, jewelry, collectibles, stamp collections, classic photograph collections, timeshares, memorabilia collections.

7. Use donor-advised funds.
Donor advised funds are a common year end planning tool.  The beauty behind them is that you can make the gift now, take the deduction now, but not distribute the proceeds until later.  They can be opened quickly — ten minutes or less — and online. It’s a great option for those who need year end deduction but don’t necessarily know where they want to distribute.  Open your donor advised fund now at

8. Consult advice (and do it now).
Seek advice.  Don’t be bashful.  Many leave year end tax dollars on the table because they don’t seek the advice of those with proper expertise. And don’t delay in seeking that advice. You may contact us at

William High is the President of the Servant Christian Community Foundation.  You may contact him at

Posted in For Advisors, For Givers. Comments Off on Year End: Tax Planning
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