Six Key Year-End Tax Moves That Ventura County Folks Should Consider

Six Key Year-End Tax Moves That Ventura County Folks Should Consider

Do you see that train barrelling towards the station? The one with “2018” all over it? This calendar year is about to change in under three weeks, and most people I know couldn’t be happier about the fact.

But what that means for our Ventura County clients and friends here at Legacy Tax Services … well, ye olde clock is ticking LOUD.

And so this week, I thought I’d dive right in to our particular area of expertise and offer you some generalized considerations for the kinds of things that you can do NOW (i.e. in the next three weeks, before 12/31/18) that can ONLY be done now, and which will reduce your state and federal income tax bill.

Which is always a good thing.

So, without further ado, let’s dive in, shall we?

Six Key Year-End Tax Moves That Ventura County Folks Should Consider

“The work of the individual still remains the spark that moves mankind ahead even more than teamwork.”  – Igor Sikorsky

Firstly, I should say that the following moves that I suggest are intended as generalized advice — which is to say that your particular situation might call for different moves. As such, I am a bit restricted in how strongly I can make certain suggestions.

So shoot me an email through the button at the top of the page if you want to discuss a private tax planning appointment for these year-end tax moves, and we’ll see what is available. Or you can also call us: (805) 650-1052

All that aside, here are some possible tax moves to consider before 12/31/18…

1) Double-check withholding and estimated taxes. Because the individual federal tax changes can either be reducing or increasing your particular situation, it’s hard to know how the various changes will interact with the rate reductions. But, if you are at risk of incurring penalties for underpayments, consider increasing your withholding rate in your December paychecks or bumping up an estimated tax payment. The IRS offers a withholding calculator that can help you evaluate your situation: https://www.irs.gov/individuals/irs-withholding-calculator. Regardless, if you are behind, a big jump in your final withholding can reduce penalties (which are NEVER advisable).

2) Evaluate where you are with charity giving. If you are itemizing, and you plan to give year-end gifts, there are a whole host of strategies that can deepen your charitable impact AND more pronouncedly help your tax bill at the same time. Gifts of appreciated securities can be great because the recent tax bill (the TCJA) retained the “fair market value” deduction for charitable contributions of appreciated property (like stock and real estate), and you can still avoid capital gain tax on the appreciation when you contribute appreciated property to charity outright. That way, you can avoid part of the gain tax and defer the rest if you use the property to create a life income gift.

And if you have a big chunk to give, you can “bunch” your contributions and indicate that you want the contributions to count for more than one tax year — which helps the charity, and might help your FUTURE tax bills at the same time.

3) Be careful about mortgage moves. In the past, making an additional mortgage payment was an easy way to reduce your tax, but the new tax laws lowered the amount of debt taxpayers can use to claim a mortgage interest deduction — from $1.1 million to $750,000. But there are grandfathering rules for some pre-existing mortgages in that range, and we can help you if it applies to you.

4) Catch up on retirement savings. Contributions can still be made pre-tax, which reduces taxable income dollar-for-dollar. The 2018 contribution limits are $18,500 for qualified plans and $5,500 for IRAs, with additional catch-up contribution amounts permitted for taxpayers age 50 or over at the end of the calendar year. However, what did change was that we cannot “recharacterize” a Roth conversion after 12/31 … so let’s make sure you are clear on if you want the Roth benefits or not for your IRA.

5) Consider making large purchases before online sales tax fully kicks in. If you have some large items to purchase online, here’s a good place for you to look to determine when your state will begin to require sales tax for online purchases: https://taxfoundation.org/post-wayfair-options-for-states/. Many states kick in on January 1, but others already have.

6) Don’t forget to give tax-free gifts and use your FSA funds. Both of those options reset on 1/1/19, so remember that you can give up to $15K tax-free to individuals before 12/31. And if you have FSA funds to use, make sure you take full advantage before the year ends.

That’s all I have for now from a generalized point of view. Though, of course, I reserve the right to offer you MORE advice in the next couple weeks. 🙂

And if you want to get more granular about your particular situation, well, we’re only an email or phone call away.

Until next week,

 

Diana Castro

(805) 650-1052

Legacy Tax Services

2018 Tax Planning Strategies Questionnaire For Ventura County Taxpayers

2018 Tax Planning Strategies Questionnaire For Ventura County Taxpayers

Wait, you thought I meant the holidays?

Ha. As much as I love Andy Williams, what I REALLY mean is tax planning season. That is to say, year-end moves. 🙂

And next week, I’ll give you some generalized moves you can make that can affect your tax bill (in positive ways only).

But the real reason I get excited about this month is that the inevitability of the calendar turning is upon us — we’re in the final month — and little alarm bells should be going off for you that there ain’t much time left to get ahead of the game.

(And yes, I said “ain’t”. I’m a tax pro, not an English major.)

You see, because as much as we enjoy unlocking the puzzle of forms, statements and spreadsheets that form the tax preparation process, what actually revs our engines is the feeling we get when the advice we’re able to offer, and the plans we craft, make a big bottom-line difference in the lives of our Ventura County clients.

Which might mean the difference between taking a vacation this year … or not. Or more, better gifts for the children over the holidays. Or maybe just that much more saved for college, retirement and weddings (my favorite).

This is the time to make and execute tax planning strategies for the end of 2018. So, take a moment to answer the questions below and email us your answers by using the email button at the top of the page. We’ll get back to you if there’s something you can do this month that would make a difference, or have you set a time to chat directly with us.

So, again, this isn’t our “official” tax preparation questionnaire, it’s simply designed to help us figure out if we can do something before year-end to make a real difference … before we can’t anymore. Please email us your answers to the below questions by clicking the email button at the top of the page.

*****

1) Have you had a significant change in your wage (or non-wage) income this year?

<Put YOUR answer here in your email reply>

2) Have you taken capital gains or losses this year? Are you planning to?

<Put YOUR answer here in your email reply>

3) Did you start or sell a business this year?

BONUS QUESTION: Do you know anyone who did, that would like input on their tax situation?

<Put YOUR answer here in your email reply>

4) Did you purchase real estate?

<Put YOUR answer here in your email reply>

5) Did you make your full contributions to retirement accounts?

<Put YOUR answer here in your email reply>

6) Have you considered a Roth IRA?

<Put YOUR answer here in your email reply>

7) Did you withdraw from retirement accounts, and for what purpose?

<Put YOUR answer here in your email reply>

**8) Have you sent your family and friends our way — and, if not, is there a way we can make this easier?

<Put YOUR answer here in your email reply>

9) Are there any other tax or financial (or other) issues you think we should know about?

<Put YOUR answer here in your email reply>

*****

Now — your answers to these questions form the “tip of the iceberg”, and they will help us to know which direction to take as we work with you over the next month to prepare for year-end. With your permission, we’ll contact you back, as appropriate, and set up a time to discuss them further with you, whether by phone or other method.

Hope to see you in here soon…

 

Diana Castro

(805) 650-1052

Legacy Tax Services

Diana Castro’s Nine Can’t Miss Questions For Year-End Tax Planning

Diana Castro’s Nine Can’t Miss Questions For Year-End Tax Planning

With the Thanksgiving leftovers mostly consumed by this point, we are turning our eyes to year-end matters.

And this year, there are LOTS of things to consider as we approach 12-31-18.

Because yes — the standard deduction this year has been significantly increased, and it might make sense for you to take that.

Or, it might not.

There are so many factors to consider in this “new” tax code, that it can be a little overwhelming. In fact, I know that there are plenty of tax pros and taxpayers in Ventura County who will opt for the “simplest” solution and just take that standard deduction. In some cases, that’s smart, and offers true savings.

But it’s not always wisest to go the simplest route.

Which is why it might make sense for us to have a chat. In fact, there may be a few moves we can make that can make a big difference — even in this next month — before we’re forced into “reaction mode”, which is the only mode in which after-the-fact tax work can be done.

So, if at all possible, I’d like to figure out if there are things we can do NOW to prepare 
by having you answer a few short questions for me…

This isn’t our “official” tax preparation questionnaire, it’s simply designed to help us figure out if we can do something before year-end to make a real difference … before we can’t anymore. To send me your answers please click the email button at the top of the page.

*****

1) Have you had a significant change in your wage income this year?

<Put YOUR answer here in your email reply>

2) Have you taken capital gains or losses this year? Are you planning to?

<Put YOUR answer here in your email reply>

3) Did you start or sell a business this year?

BONUS QUESTION: Do you know anyone who did, that would like input on their tax situation?

<Put YOUR answer here in your email reply>

4) Did you purchase real estate?

<Put YOUR answer here in your email reply>

5) Did you make your full contributions to retirement accounts?

<Put YOUR answer here in your email reply>

6) Have you considered a Roth IRA?

<Put YOUR answer here in your email reply>

7) Did you withdraw from retirement accounts, and for what purpose?

<Put YOUR answer here in your email reply>

**8) Have you sent your family and friends our way — and, if not, is there a way we can help to make this easier?

<Put YOUR answer here in your email reply>

9) Are there any other tax or financial (or other) issues you think we should know about?

<Put YOUR answer here in your email reply>

*****

Now — your answers to these questions form the “tip of the iceberg”, and they will help us to know which direction to take as we work with you over the next two months to prepare for year-end tax planning. With your permission, we’ll contact you back, once you email us your answers, as appropriate, and set up a time to discuss them further with you, whether by phone or other method.

Hope to see you in here soon…

 

Diana Castro

(805) 650-1052

Legacy Tax Services

Diana Castro’s Reflections On Lincoln’s Thanksgiving Proclamation While Our Country Is In Chaos

Diana Castro’s Reflections On Lincoln’s Thanksgiving Proclamation While Our Country Is In Chaos

Is it just me, or does it feel like Thanksgiving week arrived suddenly this year? And how did it get here so fast?

With so many momentous events over the past few weeks (elections, shootings, wildfires, and more), it feels a bit surreal — and incongruous, even — to think about pausing for the sake of giving thanks.

But, as it is here, I have some thoughts, which are perhaps a bit more meditative than normal, because of how this holiday works for tax professionals.

You see, the December holidays are wonderful, of course — but they are a calm before a big storm (tax season). We’re usually furiously prepping for the season, and seeking to understand the last-minute tax code changes that Congress often foists upon us, even this year on top of (still) receiving guidance from the IRS about everything Congress passed LAST year.

But such is our life.

And, I imagine, it might feel difficult for YOU to pause and give thanks. If you are tapped into our present cultural and political moment, it’s easy to find reasons for frustration and cynicism.

But, may I remind you of something?

It was right in the thick of horrendous civil war that President Lincoln proclaimed the fourth Thursday of November as a national day of Thanksgiving which should take place every year.

His entire Thanksgiving proclamation (written by his Secretary of State, William Seward) is worth taking in, or even reading aloud, but the opening is particularly powerful:

“The year that is drawing toward its close has been filled with the blessings of fruitful fields and healthful skies. To these bounties, which are so constantly enjoyed that we are prone to forget the source from which they come, others have been added …”

I believe Lincoln understood a fundamental truth in the human soul: how we choose to see our circumstances often dictates the state of our hearts — and, thereby, our future circumstances. After all, if a war-torn nation can turn its eyes upward — so can we.

For my part, I’m simply grateful for YOU.

I’m grateful for your trust, for your attention to my blog ramblings (which are taking on a bit of a different flavor this week), for your allowing us to serve you, for your referrals … for so many things.

I don’t forget that it’s people like you in Ventura County who enable me to do what I do — to breathe life and hope into families, and their financial situations. And to help them enjoy the fruit of their labors, while carrying the peace-of-mind that the ever-grasping hand of taxation reaching into their pockets is minimized.

So thank you. For everything.

And finally, on a “tax note”, allow me to remind you that although we are busy as we head into the end of the year, we will always make time to help you save on taxes. Give us a call at (805) 650-1052, and let’s get your 2018 tax return set up to save you the most that is legally and ethically possible.

There are lots of options, and we’re right here for you…

Until next week then,

Diana Castro

(805) 650-1052

Legacy Tax Services

One Significant Habit Of The Wealthy In Ventura County — Generous Charitable Contributions

One Significant Habit Of The Wealthy In Ventura County — Generous Charitable Contributions

Now that we have a divided Congress again, we can all sit back and enjoy the gridlock that is headed our way.

Or something.

I don’t blame you if you tune out from politics — and I also don’t blame you if you find yourself jumping more intentionally into the fray. There’s lots to be frustrated by, and plenty to fight for.

But, as I always like to say, the MOST important thing you can be doing is tending to the state of your own mind, so that you are able to be focused on those things that most concern your family and financial world.

And yes, I know that’s “easy to say” as somebody who has built a business in Ventura County, and is making certain progress … but it’s also because I have chosen to focus on these things that we are even having this conversation right now.

So, if you want to add focus to those more private matters and you need somebody to pay attention to how upcoming Congressional actions will be affecting your finances … well, that’s exactly what we’re here for. We pay attention to these things so you don’t have to. It’s just what we do.

With all of that said (and speaking of habits that will help you), I’m returning to one of my favorite topics today. Would love your thoughts…

One Significant Habit Of The Wealthy In Ventura County — Generous Charitable Contributions

“My best friend is the one who brings out the best in me.” – Henry Ford

We’re into the final quarter of 2018, and since this is the biggest quarter of the year for giving, I’d like to take the opportunity as one of your financial advisers to make a few points about giving to charity.

Because with more taxpayers taking the standard deduction than has been done in years past (at least in terms of what people are projecting for this upcoming year), there are some who might be wondering if they should be as aggressive about charity as they have been in the past.

In which case, allow me to posit a question:

Why do you give to charity? Is it for the tax deductions … or for a different reason?

Now, as someone who prepares tax returns (and who figures out all the many new ways we can keep more of your money in your pocket), much of what we do revolves around tax avoidance strategies. I have ZERO problem whatsoever in helping my Ventura County clients use all available strategies to their utmost, ethical advantage. But I love it when I see my clients and friends make giving decisions which seem to run counter to immediate, short-term self-interest.

And, I believe it’s actually enlightened self-interest in the long run. And not just in our sense of feeling good.

I also see the balance sheets of people from every walk of life and every kind of income class, and over the years I’ve noticed an interesting phenomenon: individuals and families who make giving a priority, even when they aren’t “wealthy” by others’ standards, seem to eventually do better in the long run. And I do mean financially — not just in their state of mind.

(Though, there are great “state of mind” reasons for giving. Have you seen, as I have, that those who freely give seem to be much more pleasant company?)

In my line of work, I have made it a point to observe how money works. And, for some reason, money gets attracted to those who aren’t in hot, desperate pursuit of it. It’s almost like in romance — potential lovers are usually turned off by the overly-aggressive seeker.

So, because of (and not despite) the shifting nature of how charitable contributions might be counted on your taxes, may I suggest that you consider increasing your giving? You might be surprised by what happens in your heart. And, dare I say, in your balance sheets.

Lastly, let me also say that just because you give — you don’t have to be a dunce! We can help you determine the most tax-advantaged way under the “new” tax code for you to do your giving, if you want that advice.

We’re only an email or phone call away.

Until next week,

 

Diana Castro

(805) 650-1052

Legacy Tax Services

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