Be prepared to make the most of your upcoming tax filing and plan for 2016. Discussing these items with your tax preparer could potentially save tax dollars now and/or in the future:
- 2015 IRAs. Am I eligible to fund an IRA for 2015? If so, what kind – a traditional IRA (deductible), a Roth IRA or a traditional IRA (non-deductible)? What about my spouse? How about an IRA contribution for 2016?
- Roth conversions. With the stock market down over last several months (as measured by the S&P 500 index, August 1, 2015 through January 30, 2016), my traditional IRA balances are down. Should I consider a Roth Conversion in 2016? What are the tax implications, if any?
- Required minimum distributions. I currently have to take Required Minimum Distributions (RMDs), although I really don’t need the RMD for cash flow. Should I consider donating my RMD or part of my RMD to charity? Speaking of charity, my contributions are generally over $5,000 a year. Should I consider using appreciated securities instead of cash? What are the additional tax benefits?
- Estimated tax payments. I make state estimated tax payments quarterly; the 4th quarter estimate is due January 15th, 2017. Would it better for me to make the 4th quarter estimate in December 2016 to get a current year tax deduction?
- Portfolio transactions. What was the result of my investment portfolio transactions for 2015? Did I have an overall gain or loss? If a loss, what is my capital loss carryforward to 2016? If there was a net gain, should we set a time in early November to discuss with my financial advisor so we can review my portfolio activity to try to drive down my tax liability?
Source: SEI Investments Management Corporation
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