Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Thursday, December 3, 2020

14 important end of year tax planning tips

TaxesAlthough the end of the year is approaching, there are still financial steps that you can take to set yourself up for tax savings. 

Discussed below are 14 tax planning tips that you can use before the end of the year.

1. Qualifying for a QBI Deduction

The Qualified Business Income deduction can be used for owners of many pass-through businesses. 

2. Analyzing Cost Segregation

"Cost segregation is a tax planning tool that accelerates the rate of depreciation of property components to thereby lower the amount of taxable income."

3. Carrying Back Net Operating Losses

4. Converting to a Roth IRA

5. Transferring to an Irrevocable Trust

6. Establishing Profit Sharing and Defined Benefit Plans

7. Funding an Employer-Sponsored 401(k) Plan

8. Claiming Disaster Loss Funds

"As all 50 states, the District of Columbia, and five U.S. territories were declared disaster areas resulting from the COVID-19 pandemic, every U.S. business may be eligible for refunds from certain types of disaster losses."

9. Setting Up a Charitable Trust

10. Looking into Tax-Loss Harvesting

11. Contributing to 529 Plans

12. Accelerating AMT Refunds

13. Maximizing Flex Savings Account

14. Gifting Funds to Children and Grandchildren 

If you believe that any of these strategies will be useful for you in tax planning, or want to find which strategies best fit your plan, you should talk to a financial advisor who can advise you accordingly.

See Syed Nishat, 14 important end of year tax planning tips, Wall Street Alliance Group, November 11, 2020.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

https://lawprofessors.typepad.com/trusts_estates_prof/2020/12/14-important-end-of-year-tax-planning-tips.html

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