Did you know...
Historically, many people don't think about taxes until they're facing the April 15th deadline. But by then, it's too late to do any productive planning.
One of the best ways to save on income taxes is to max out your 401(k). You can contribute up to $18,000 into your 401(k) in 2017 and if you are over age 50, you can make an additional "catch-up" contribution of $6,000. But this is just the beginning. At the end of the year, you should also review with your financial planner the "nuts and bolts" things that can impact taxes; estimated tax payments, the sale of a residence, distributions from qualified plans or IRAs, as examples.
In addition, reviewing your estate plan with your financial advisor before the end of the year may help reveal some additional tax-reduction strategies appropriate to your situation.
For example, one thing that could help save taxes is to shift passive income-producing assets like rental real estate to a family limited liability corporation (LLC) or a family limited partnership (FLP).
Gifting can also be a sound-tax savings strategy. Instead of giving cash to a charity, consider gifting appreciated assets. You don't have to pay any tax on the gain - neither does the charity. So you get the deduction for the gift subject to certain limitations, and you eliminate the capital gains tax.
Reference: Talking Taxes - Bylined Article CRN 940602-060514
Eric Bailey is a registered representative of Lincoln Financial Advisors. Securities and advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. Bailey Wealth Advisors is not an affiliate of Lincoln Financial Advisors.