As the end of the year approaches we here at Chilton Trust would like to highlight a handful of topics we think will help maximize efficiency in both your income and estate tax planning. We hope that we can get you thinking about your current tax situation and how to better plan for your future.
Housecleaning
Outlined below are ideas every taxpayer should be sure to address before the end of the year. Please reach out to your tax accountant or financial adviser if you have questions about any of these:
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Maximize your annual gift exclusion(s). Single taxpayers can gift up to $15,000 and married taxpayers can gift up to $30,000 per recipient without being subject to the gift tax. Ask your tax adviser for more details on what gifts may qualify for this treatment.
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Utilize the increased lifetime gift and estate tax exclusion while it is in effect. The Tax Cut and Jobs Act increased the lifetime estate and gift exclusion to $11,180,000 per taxpayer. Please note that some states have their own estate or gift tax exemption limits, which do not always match the federal amounts. Consult your tax adviser to confirm your estate plans have taken this into consideration.
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Consider a Qualified Charitable Contribution (QCD). For charitably inclined taxpayers who are required to take Required Minimum Distributions (RMD) from retirement accounts, and who do not need the money to live, up to $100,000 per taxpayer ($200,000 Married Filing Joint (MJF)) can be treated as a QCD.
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Time capital gains with capital losses. Your financial adviser is probably already practicing this with current year activity, but check with your tax adviser to see if you have any capital loss carryovers to offset other potential gains you could accelerate into 2018.
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Plan the timing of deductions. With the new increased standard deduction (discussed later), taxpayers who have historically itemized may not exceed the standard deduction. Pay attention to the timing of medical bills, taxes and charitable contributions. If it makes sense accelerate or defer the payment into another year to take advantage of the higher standard deduction.