Tax Planning and Wealth Building Tips for 2017

| By Alicia Sisk-Morris, CPA, ME |

Estimated Taxes: If you are self-employed or have income that is not ordinarily taxed like Dividends and Interest, it is time to consider your estimated tax payments for 2017. Many CPAs automatically prepare this number for you, as I do for my clients. However, it is important that you do your part in this process. What in your life is changing in 2017 vs. 2016? Are you selling stock? Changing jobs? Starting a business? These questions and more should be considered. This is important information that will affect your estimated taxes, and you will need to share that with your tax professional.

Retirement Accounts: It is never too early to start planning for retirement. You can make 401(k), IRA, Roth IRA and SEP IRA donations throughout the year. Many of my clients find it easier to make small payments each month as opposed to making one big payment at the end of the year. Making a deductible contribution will help you lower your tax bill this year. Plus, your contributions will compound tax-deferred. If you put away $5,500 a year for 20 years in an investment with an average annual 7 percent return, your $110,000 in contributions will grow to $241,258! Another consideration is whether this year is a good year to move your Traditional IRA into a Roth IRA. Roth conversions can be a very powerful planning tool, but they are not for everyone. A good tax advisor can help you understand all the factors before choosing a Roth conversion.

Are you eligible to claim a casualty loss? With the recent flooding in Eastern North Carolina and the fires in Western North Carolina, it is a good time to remind taxpayers in a federally declared disaster area that they have the option of claiming disaster-related losses on their federal income tax return for this year or last year. Your CPA will help you determine which tax year will give you the largest tax benefit.

Plan the Timing of Charitable Giving: Many clients plan the timing of charitable contributions and the type of property contributed to maximize tax savings. The contributions should be timed to occur in a year where the individual will have the highest taxable income. You can also consider donating appreciated, publicly traded stock or other securities held for more than one year rather than cash. In most cases, the contribution of a long-term capital gain property allows for a deduction equal to the fair-market value of the property contributed and avoids taxation of the appreciation.

Gifts to Children and Grandchildren: If you intend to make gifts to children or other relatives you can give gifts of up to $14,000 per person without needing to report it as a part of the lifetime gift exemption.

Are you planning to Marry? Taxpayers are considered married for the entire year even if they get married on December 31st. As part of your tax planning, is it better financially for you to marry this year or next?


Alicia Sisk-Morris is a CPA with over 20 years’ experience in Asheville and Weaverville. Her firm services individuals, small businesses and not-for-profit clients that range from solo-entrepreneurs to artists, alternative and traditional medical professionals, construction firms, architects, engineers, real estate professionals, schools, business executives, and start-ups. Alicia is an instructor for AB Tech College, Small Business Administration workshops, and the Western Women’s Business Center, and a public speaker and trainer. Learn more at: www.siskmorriscpa.com.

Sandi Tomlin-Sutker
Written by Sandi Tomlin-Sutker