by Kevin Rigg, Director of Financial Life Planning, CPA, CFP®

As 2019 draws to a close, I want to pass along some tax planning tips and a reminder of upcoming tax-related deadlines.

Fourth-quarter tax estimates are due soon. To avoid penalties, be sure to have your payment in the mail no later than January 15, 2020.
Review your pay stubs. If cash flow allows, make sure to maximize contributions to your tax-qualified accounts before year-end (e.g., 401(k)/403(b)/401(a)). Contributions to IRAs (including Roth’s) can be made up until April 15, 2020.
Fill up lower tax brackets with Roth conversion income. Roth conversions must be completed by December 31st and can no longer be recharacterized in the following year.
Consider the timing of state/local tax payments, medical expenses, and/or charitable contributions in order to maximize your itemized deductions and bring them above the new, higher standard deduction ($12,200 for singles and $24,400 for marrieds).
Utilize a Donor-Advised Fund to take an immediate tax deduction for current contributions while maintaining the ability to distribute funds to your preferred charity at a later date. These are great tools for accelerating deductions as discussed above.
Use a Qualified Charitable Contribution (QCD) to contribute directly to a charity out of an IRA. A QCD is only available for those subject to a required minimum distribution (RMD). The QCD goes towards fulfilling the RMD, does not have to be reported as income, and is especially beneficial for those who do not itemize their deductions.

At SoundView, we evaluate your personal tax situation and let you know if any tax planning strategies should be considered before year-end. We’ll make every effort to coordinate planning with your tax preparer, both to get their input prior to implementation and to ensure they have everything they’ll need to file complete and accurate returns for you in the coming year.