The end of the year is crunch time for tax planning. Donald Trump’s tax plan will bring about lower tax rates starting next year, but it will also likely result in the elimination of certain tax deductions. And although his tax plan will be passed sometime in 2017, many experts believe that the changes will be made retroactive to January 1, 2017.
With that in mind, here a four quick-hit tax strategies that may help you as 2016 comes to a close:
1.Prepay your real estate taxes.
This deduction is expected to disappear under Trump’s tax plan, so get the most out of this deduction that you can while it is still available in 2016.
2.Defer any income or bonuses to 2017
Not only does deferring income until January give you an extra year to pay those taxes, since the tax rates are coming down, deferring the income to next year will result in a lower amount of taxes you will owe on that income.
3. Put off selling appreciated stocks to 2017
Even though the tax rate on capital gains isn’t expected to change next year, Trump is expected to repeal the 3.8% Obamacare investment surtax. This tax is currently assessed if you have investment income (including capital gains) and your income is over $200,000 (single individuals) or $250,000 (married couples).
4. Convert your traditional IRA to a Roth IRA next year
Converting a traditional IRA to a Roth IRA is a taxable event and if you hold off on the conversion until 2017 when the tax rates are lower, you will owe less taxes on the conversion.
Deferring income and accelerating deductions is a tried-and-true tax strategy, and it is even more important now with lower tax rates coming next year. And even though we don’t know the exact timing of when the tax cuts will take place, we do know that they are coming, and a little planning now can save you “bigly” on your tax bills for both this year and next year.
Oxfam International has released its list of the world’s worst corporate tax havens. These are countries that offer sweetheart deals and rock-bottom corporate tax rates to lure businesses to their jurisdictions.
Here are the worst offenders according to Oxlam:
2. Cayman Islands
9. Hong Kong
15. British Virgin Islands