2015 Year-End Tax Moves

As 2015 winds down, now is the time to think about some year-end tax planning moves that can help you save some tax dollars.

Charitable Contributions
I’m sure you’ve heard that your charitable donations should be planned out during the year so you can maximize your write-offs come tax time. But also keep in mind that charitable contributions are deductible when charged to your credit card rather than when you pay the credit card company. So you can make a charitable donation to your organization of choice via a credit card charge on say December 30th, and not actually pay the credit card bill until January 20th of the following year, but still get the deduction on your 2015 tax return.

Stock Or Investment Sales
A common planning technique to minimize capital gains taxes is to sell your stocks that have performed poorly during the year to offset any gains on sales that you have made earlier in the year. Let’s take this a step further. You may have experienced unrealized or “paper” losses on a stock in a particular company or industry in which you want to actually keep the investment. By selling the shares before the year ends, you can realize a loss to offset any prior capital gains. You then can re-buy other shares in the same company or buy shares of another company in the same industry. However, if you buy back the same securities, this must be done at least 31 days after the original sale, or the loss on the sale will be disallowed.

Gifts To Family Members
You can give $14,000 to a family member, or any other person, for that matter, in 2015 without incurring any gift tax. If spouses elect to split the gift, this annual exclusion amount increases to $28,000. By implementing this technique on an annual basis, the donor can shift a significant amount out of their estate without any gift tax implications. Also, as long as the gift check is given to and deposited by the donee on December 31, 2015, it will be treated as a completed gift for 2015 even if the check doesn’t clear until 2016.

Required Minimum Distributions (RMDs)
If you’ve reached age 70-1/2 make sure you take your 2015 RMD from your IRA, 401(k) plan or other employer sponsored retirement plan. Forgetting to take the withdrawal can result in a penalty of 50% of the amount of the RMD not withdrawn. If you have turned age 70-1/2 in 2015 your RMD can be delayed until 2016. But if you elect to do this, you will have to take a double distribution in 2016; the amount required for 2015 plus the amount required for 2016.