Family tax planning
- Determine whether you can shift income to family members who are in lower tax brackets in order to minimize overall taxes.
- Consider making gifts of up to $15,000 per person federal gift tax free under the annual gift tax exclusion. Use assets that are likely to appreciate significantly for optimum income tax savings.
- Take advantage of tax credits for higher education costs if you’re eligible to do so. These may include the American Opportunity (Hope) credit and the Lifetime Learning credit. Note that these credits are based on the tax year rather than the academic year. Therefore, you should try to bunch expenses to maximize the education credits.
- Make a charitable donation (cash or even old clothes) before the end of the year. Remember to keep all of your receipts from the recipient charity.
- Use appreciated stock rather than cash when contributing to charities. This may help you avoid income tax on the built-in gain in the stock, while at the same time maximizing your charitable deduction.
- Use a credit card to make contributions in order to ensure that they can be deducted in the current year.
Ready to start planning for a brighter future? Call today at (408) 840-4030, or contact our team online.