By Cynthia Black Svenson

With only six weeks left in 2015, now is a good time to determine if it makes tax sense to take certain actions before year-end.

  • Are you planning to make charitable contributions in the near future? Do you have a winter property tax payment to make? Depending on whether it would be more tax-efficient to offset 2015 or 2016 income with greater deductions, planned charitable contributions and winter property tax payments can be made either before of after year-end.
  • Are you planning on making annual exclusion gifts? Do you want to gift more than the annual exclusion amount to any person within the next few months? You may make gifts of up to $14,000 per calendar year per recipient with no requirement to file a gift tax return, so you could make a gift of up to $14,000 before year-end and then another gift of up to $14,000 to the same recipient at the beginning of 2016.
  • Are you planning on converting a traditional IRA or a traditional 401(k) to a Roth IRA or a Roth 401(k)? Depending on the level of income and offsetting deductions that you project for 2015, 2016 and future years, and the projected change in the value of the account to be converted, it can be determined whether it would be most efficient to convert before year-end, to convert after year-end, or to spread the conversion over two or more years.

These are just a few examples of actions that can be timed to optimize tax savings. Please contact Cynthia Black Svenson in our Troy office at 248-433-7530.