2019 Year-End Tax Planning

Year-end tax planning in 2019 remains as complicated as ever. Notably, we are still coping with the massive changes included in the biggest tax law in decades — the Tax Cuts and Jobs Act (TCJA) of 2017 — and pinpointing the optimal strategies. This monumental tax legislation includes a myriad of provisions affecting a wide range of individual and business taxpayers.

Among other key changes for individuals, the TCJA reduced tax rates, suspended personal exemptions, increased the standard deduction and revamped the rules for itemized deductions. Generally, the provisions affecting individuals went into effect in 2018, but are scheduled to “sunset” after 2025. This provides a limited window of opportunity in some cases.

The impact on businesses was just as significant. For starters, the TCJA imposed a flat 21% tax rate on corporations, doubled the maximum Section 179 “expensing” allowance, limited business interest deductions and repealed write-offs for entertainment expenses. Unlike the changes for individuals, most of these provisions are permanent, but could be revised if Congress acts again.

Keeping all that in mind, we have prepared the following 2019 Year-End Tax Letter. For your convenience, the letter is divided into three sections:

INDIVIDUAL TAX PLANNING
Before year-end is the time to analyze necessary actions to maximize itemized deductions, charitable contributions, education tax breaks and avoid alternative minimum tax while verifying your estimated tax payments are enough to avoid penalties. Click here to read additional details on these items.

BUSINESS TAX PLANNING
December offers the last chance to implement a strategy related to depreciation related deductions, maximize the 20% qualified business income deduction, prepare for new overtime rules, and lower your business’s overall tax burden. Click here to read additional details on these items.

FINANCIAL TAX PLANNING
Before closing out 2019, taxpayers should review their portfolios for potential capital loss harvesting while reviewing required minimum distributions and planning for year-end gifts. Click here to read additional details on these items.

Be aware that the concepts discussed in this letter are intended to provide only a general overview of year-end tax planning. It is recommended that you review your personal situation with a tax professional.

The full 2019 Year-End Tax Planning PDF can be found here.