Now that you’ve filed your 2016 tax return, your initial reaction is likely one of relief. You don’t have to worry about anything tax-related for close to another year, right? Not so fast! While it may be possible, it’s certainly not prudent!
Now is the perfect time to sit down and think about your tax situation. What went right during 2016? What went wrong? Is there something you could have done differently if only you had more time? Take the opportunity to think prospectively about 2017 and line up any tax planning opportunities now.
What if tax reform happens and it changes everything?
Well, first of all the timeline for tax reform seems to be a moving target! We may not see any real change for quite some time. But putting the timing issue aside, it’s unlikely that every planning opportunity out there is going to disappear! There are lots of things you can do despite uncertainty in the air.
What are some of the things you should consider in 2017?
Just as you map out a budget for the year, map out an income tax projection as well. Things to consider include:
- Do you expect any significant changes in wages or business income this year? - Do you anticipate buying or selling any real estate? - Does your investment advisor want to make any changes to your asset allocation? - If retirement is near, do you plan to stay local or is a change in residency a possibility? - Have you recently received an inheritance or other source of funds that you plan to redeploy in the markets? - Are there any family changes on the horizon? - If you are already retired, when do your required minimum distributions start?
Have a conversation with your tax advisor about your goals for 2017.
Even things that don’t sound like they have a tax impact just very well might! By thinking ahead now, you can help ease some significant year-end stress and ensure that you are able to execute an efficient tax plan for 2017!