“Don’t wait until April 15!”

By Martin Spears
Managing Partner Operations, SSCG
Senior Financial Advisor, RJFS

Can it really be the middle of October? The unseasonably high temperatures that we experienced seemed to suggest that summer was never going to end!

With the end of the year approaching, now is a good time to start thinking about your tax strategy. Preparing for tax season now will help keep your portfolio aligned with your short- and long- term goals. Here are a few things to keep in mind as the tax year comes to a close.

For Individuals

Consider using tax-advantaged accounts to help lower your tax bill. One key to lowering your tax obligation is really quite simple: Report lower taxable income. Since few of us actually want to earn less, the next option is to put as much income as possible into tax-advantaged accounts.

• If you haven’t contributed the maximum amount to a qualified retirement plan at work throughout 2019, consider adding money before it is too late. Contribution limits for 401(k) and other retirement plans for the 2019 tax year are $19,000 or $25,000 if you’re 50 or older.
• Also consider saving on a pre-tax basis for healthcare. You can accumulate funds on a tax-deferred basis to pay for healthcare expenses through either a health savings account (HSA) or flexible savings account (FSA). Your workplace may offer one or both of these options, so check with your employer. Raymond James also now offers HSA accounts, so please let us know if you would like more information.

For Business Owners

For business owners, there are many opportunities designed to alleviate your tax burden. Here are a few things to consider to get the ball rolling.

• Did you buy equipment? Take a deduction.
• Defer income and accelerate deductions.
• Deduct vehicle expenses.

Charitable giving

One of the things we enjoy at year-end is helping our clients facilitate gifts to organizations and charities that they are passionate about. As a reminder, there are a few different ways to make those gifts.

• Write a check. This is one of the easiest ways to gift, especially for those who give sporadically to a limited number of charities.
• Donate appreciated stocks. Doing so means you’ll receive an immediate tax deduction and can help you avoid paying capital gains tax on the appreciated portion of their value. Gifts also have the potential to reduce future estate taxes. In most instances, we are able to help transfer these stocks directly to the charity from your Raymond James account. However, we need these instructions by early December to make sure there is adequate time to process.
• Donor-advised funds (DAFs). Think of this as a charitable checking account. DAFs combine the ease of direct giving with the benefits of a private foundation – with less work and time commitment. Because the funds are sponsored by a charitable organization, donors avoid the cost and upkeep of creating a foundation, but still have a hand in the grant-making decisions and can even name the fund itself. To get started, you make an irrevocable contribution (e.g., cash or marketable securities) to the fund. You take an immediate tax deduction, subject to income limitations; the fund sells and reinvests the assets, and you help direct when and how the proceeds are used, often with a few simple clicks online.*

While these are by no means exhaustive, they should be enough to get you started when it comes to tax-saving tactics that could work for you and your business. As always, we welcome the opportunity to sit down to discuss these and other year-end tax strategies.

Enjoy the Fall,
Martin

* Donors are urged to consult their attorneys, accountants or tax advisors with respect to questions relating to the deductibility of various types of contributions to a Donor Advised Fund for federal and state tax purposes. To learn more about the potential risks and benefits of Donor Advised Funds, please contact Raymond James.

Raymond James financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.