2016 Year End Tax Planning Tips

In the midst of the joy of the holidays, in the back of many minds is the End of Year Tax Deadlines. Income taxes are one of the largest annual expenditures, so you want to consider opportunities to reduce or defer your annual tax obligation. We are here to help with individual as well as business taxes. If there are any questions you have please don’t hesitate to call us.

Tax filing season is quickly approaching, and for most taxpayers, Dec. 31 is the last day to take actions that will impact their 2016 tax returns. Charitable contributions, donations charged to a credit card, and checks to a charity all need to be taken care of before the end of the year in order to be applicable to 2016 tax returns.

For name changes due to marriage or divorce, notify the Social Security Administration so the new name will match IRS and SSA records. Also notify the SSA if a dependent’s name changed.

Taxpayers over age 70 ½  are generally required to receive payments from their IRAs and workplace retirement plans by the end of 2016, though a special rule allows those who reached 70 ½ in 2016 to wait until April 1, 2017 to receive them.

Effective Jan. 1, 2017, any Individual Taxpayer Identification Number (ITIN) not used at least once on a tax return in the past three years will no longer be valid for use on a return. ITIN with middle digits 78 or 79 will also expire on Jan. 1. Those with expiring ITINs who need to file a return in 2017 must renew their ITIN. Affected ITIN holders can avoid delays by starting the renewal process now. 

Attached below are two end of year tax planning letters. One is for individuals, and one is for businesses. Pivot CPAs is happy to provide these and answer any questions you may have. Again, please feel free to call our office at 904-280-2053