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Written by Brendan Winkler, CPA

As we near the end of 2015, it is important to organize the financial information that may be relevant for your tax filing. You’d be surprised how beneficial the completion of a simple year-end checklist can be in helping you and your families maximize their tax savings. We’ve outlined six quick tips you potentially could take advantage of before December 31 to lower your tax liability come April:

1. Check W-2 Withholdings

While there are many factors that may affect whether or not you receive a refund on your 2015 tax return, the most crucial may be having the correct amount of tax withheld from your paychecks throughout the year. This is especially important if you have undergone a major life event such as getting married or having a child. With one or two paychecks remaining, you still have time to make adjustments if you are off track. Learn more about tax planning services from Geier »

2. Charitable Contributions

Over the years, you have probably accumulated a variety of unused clothing and household items. Instead of savings these items for your annual “spring cleaning,” gather and donate them to the nearest Goodwill or Salvation Army. Assuming your donations are in good condition, you can record the items and obtain a receipt from the nonprofit organization. You be able to deduct those contributions on your tax return (restrictions may exist based on your AGI level). Learn more about charitable giving services from Geier »

3. Contribute to your Retirement Accounts

If you have accumulated excess funds in your checking or savings accounts, you may be in a position to maximize your retirement account contributions. Increasing your deferral into your company 401(k) and funding a deductible IRA are two ways that provide you immediate tax relief. Funding a Roth IRA is another intriguing option that will offer significant long-term tax benefits for investors.  Certain retirement accounts are more appropriate than others, so make sure you have a conversation with your advisor to determine which is best for you. Learn more about retirement planning services from Geier »

4. Tax-Loss Harvesting

Throughout the course of 2015, the stock market has been extremely volatile. In August and September, the stock market experienced a correction that may have left some of your investments in the red. Tax-loss harvesting, or selling a position to recognize a capital loss, is a vital year end strategy that may benefit you. If you have realized gains earlier in the year, harvesting a loss will allow you to offset those gains, resulting in no taxable gain at file. Or, if you have no capital gains to offset, you can harvest a loss to maximize the annual, allowable capital loss amount. As an individual taxpayer you are eligible to deduct up to $3,000 in capital losses in excess of gains each year as an adjustment to your AGI, with the remainder carried over to future years. Simply selling a position at a loss and replacing it will a comparable investment is a strategy that can save you a substantial amount of money in taxes while not compromising your investment strategy. Learn more about capital gains distributions for 2015 »

5. Accelerated/Decelerated Expenses

For clients who do not fall into the Alternative Minimum Tax, it may be advantageous to pay next year’s deductible expenses before the end of 2015. For example, if you have a property tax bill that is due early in 2016, paying the bill in December of 2015 will combine this payment with the one you made at the beginning of the year. Compounding these payments into one year will provide a larger deduction in the current, thus reducing your tax liability. If you believe you will earn significantly more income in the following year, it may make sense to postpone some December expenses into January so that the deduction is taken against income set to be taxed at a higher rate.

6. 529 College Account Contributions

Many states, including Maryland, provide an incentive for account holders to contribute to college accounts. In Maryland, if you contribute to the College Savings Plan of Maryland 529, you are eligible for a state income tax deduction on up to $2,500 of annual contributions. These contributions must be deposited by December 31, so if you have a few extra dollars available for investment, funding a college account for your loved ones is a tax-advantageous option for many. Learn more about education planning services from Geier »

Tax Planning & Preparation from Geier Asset Management

Depending on your specific situation, some of these tax tips may be of interest to you. At Geier Asset Management, we work directly with our clients to ensure these items are addressed. We are available to help review your YTD withholdings, run a tax projection, or help determine which type of retirement or college account fits for you. Our client managers and tax professionals are available to assist you in analyzing your tax situation and implementing these strategies in an effective manner.


© Geier Asset Management, Inc. December 2015.  Brendan Winkler is a Staff Accountant for Geier Asset Management, Inc., a Registered Investment Advisor.  The above blog reflects the opinions of Mr. Winkler and not necessarily the firm. Any advice given is general in nature and investors must consider their own individual circumstances. Past performance is no indicator of future performance. The firm makes no warranties or representations of any kind relating to the accuracy or timeliness of the information provided.