Individuals

• Maximize your retirement contributions. Many employers offer plans where you can defer a portion of your salary in a tax-deferred retirement account. The most common plans are called 401(k) or 403(b) plans. If your employer offers to match your contribution, you should consider contributing enough to maximum your employer’s matching contribution. Take advantage of pre-tax monies, 401k, 401k Matching Plans, IRAs and Municipal Bonds.
• Tax-Exempt Municipals. Interests on state or local bonds are exempt from federal income tax and from the issuing state or locality. Interest paid on these bonds typically is less than commercial bonds.
• However, individuals in high tax brackets will typically receive more after-tax interest from municipals bonds.
• Group deductible expenses such as medical expenses, charitable contributions, state tax, and investment expenses into one year to maximize your itemized deductions.
• Health savings accounts. Consider making contributions to a health savings account (HSA) especially if you have a high-deductible medical plan. Withdrawals from your HSA are not taxable as long as you use them to pay for medical expenses. Take advantage of pre-tax monies, HSA, MSA, FSA.
• Health insurance coverage. You may be penalized for not complying with the Affordable Care Act coverage mandate. If you are not covered through an acceptable ACA plan, you should obtain coverage to ensure you will not be penalized.
• Accelerate Capital Losses and Defer Capital Gains. If you have an investment with a capital loss consider selling it. You can deduct capital losses up to the amount of capital gains plus $3,000. If you have an investment with a capital gain, consider selling it after year end. You can defer payment of the capital gain for another year.
• Automobile mileage. Keep track of the miles you drive for charity, business, moving, and medical purposes.
• Clean out your closets and donate toys, furniture, clothes, etc. to a charity before year-end. Make sure to obtain your signed and dated donation receipts.
• Life changing events. Marriage, divorce, a new baby, or having a children becoming a nondependent will affect the amount owed in taxes. Other events could include changing jobs, retiring, or a death of a spouse. You will want to plan accordingly.
• Make gifts to family members to take advantage of the gift tax exclusion per person.

Business Owners

• Setup up a self-employment retirement plan. If you are self-employed, consider setting up your own retirement account. There are several self-employed retirement plan options that will allow you to contribute and defer a large amount of your income.
• Home office deduction. If you use a portion of your home to run your business, you are allowed to deduction a portion of your home rent, utilities, HOA fees, insurance, and repairs. Make sure to dedicate a portion of your home solely for business purposes.
• Automobile mileage. Keep track of the miles you drive for business purposes.
• Defer income. Consider billing and invoicing clients after the end of the year. Make expense payments prior to the end of the year.