2019 Tax Planning

It’s never too early to think about tax planning.

While tax laws change from year to year, the consideration that always stays at the top of the list is having cash. The sad reality of tax planning is that it takes money going out of your bank account to reduce your taxes. Make sure you have adequate funds available to act.

Now that we have that reminder out of the way, let’s get into a few strategies that will reduce your tax burden for 2019.

• Retirement – make sure this is funded to the maximum allowable. There are many options, so speak to a knowledgeable financial adviser that is familiar with healthcare.

• Tax-Loss Harvesting – sell stock that is in a loss position to offset your gains for the year.

• Donations – these still count, so continue to give. Check with your state to see if there are additional incentives to give to certain organizations. In Idaho, the state will give an additional tax credit if you give to higher education.

• 529 Plan – This account was originally designed to pay for college, but recent changes have increased the scope to K-12 education up to $10,000 per account held (up to two max). This means that you can fund an account and have it grow tax free and use those funds to pay for your kids K-12 education. Check with your state on this as well. Idaho lets you deduct up to $12,000 ($6k per spouse) on your state return if you fund an Idaho 529 plan.

• Buy Assets – while this is still a viable option, I never recommend buying assets just to save taxes. Make sure there is a legitimate business reason. It makes absolutely no business sense to pay $10 for something you don’t really need to save $4. You are still out $6!