Now that the holiday season is here, it is easy to lose sight of the fact that 2016 is merely a few weeks away. Combine this with the stress of planning holiday vacation time, completing year-end paperwork and disclosures for your business and finding time to attend school programs, and it is easy to forget that estate planning involves tax planning as well.
With our posts focusing on end-of-year planning tips from now until the new year, this post will focus on the tax benefits you should be aware of as 2015 winds down.
Contribution limits Most people have automatic withdrawals and employer matching programs attached to their 401k accounts. Depending on what you have contributed this year, you may be eligible to make an extra payment to these types of accounts by using a year-end bonus. This could not only help in fortifying your plan, it could save you some money come April.
New estate tax thresholds Last year saw an increase in the federal estate tax threshold. Essentially, estates valued at $5.35 million and above would likely be subject to an estate tax. In 2016, this threshold goes up; with the tax applying to estates worth $5.45 million and up.
Other tax provisions may be renewed The annual Christmas dance between lawmakers has already begun, even though the threats over potential government shutdowns have been toned down lately. Nevertheless, charitable distribution limits from IRAs, and similar deductions that help estate planning efforts are likely to be renewed absent some controversial measure.
If you have questions about year end tax planning strategies, an experienced estate planning attorney can help.
The preceding is not legal advice.