Tax Planning Essentials

As year another year closes, many of us have several things we need to take care of before the year ends.  You may find yourself purchasing gifts, preparing for the holidays, and doing other tasks.  I hate to be a grinch, but you may need to add some end of year tax planning essentials to your to-do list for this year.

1. RMDs from Retirement Account Holders.  Many retirement account holders are required to take Required Minimum Distributions (or RMDs) from their retirement accounts.  Retirement account holders are generally required to start taking RMDs at age 73.  You can read more about RMDs here.
2. Charitable Contributions.  Charitable contributions can be a great way to lower your tax bill and help your community.  Charitable contributions are only deductible if the organization is a recognized 501(c)(3) organization.  In order to receive the tax benefits from charitable contributions you normally have to itemize your deductions.
3. Stock or asset sales.  This is something you may want to deliberately put off until after January 1^st, 2025. If you sell a stock or other assets before January 1^st, 2025, the tax on the gain of the stock or other asset sale will be due in 2025.  If you postpone the sale until after January 1^st, 2025, you can push the tax until 2026 or perhaps even later.
4. January 2025 mortgage payment.  You may want to pay your January 2025 mortgage payment before December 31^st, 2024. The additional mortgage interest you pay this year will translate to a larger deduction for this year. 
5. Get ready for the 2025 tax season.  April 15^th will be here sooner than we know it.  If you find yourself having some downtime in the next couple weeks, it would be a good idea to organize your receipts and other records in order to be ready to prepare, file, and pay your taxes.

At RJS LAW, we help our clients with tax planning, estate planning, state tax matters, and federal tax matters.  Please feel free to contact us at 619-595-1655 or via our web site at RJS LAW to arrange a free consultation if you have any tax questions or tax problems. 

Happy Holidays. 

Written by Joseph Cole, Esq., LL.M.