Boosting Your Deductions

New Years is 18 days away. Christmas is 11 days away! What does this mean?

Now is the time to get rid of some extra cash! Many deductions that we take for granted during the year can only be taken if the goods are bought and put in service by December 31 of each year. Some survive the New Year (such as retirement contributions), but most don’t.

Specifically, on a personal level, don’t be afraid of investing in a new car. The 2016 models are selling for reduced prices and if you live in a state with a sales tax, the sales tax alone could boost the amount you get on 2016’s tax refund.

Businesses, also beware the New Year. If you are planning on buying new equipment, the Section 179 deduction only applies to qualifying goods placed into service this year. If you wait until 2017 to purchase and place in service new items, that Section 179 deduction won’t be applied until next year’s return.

It is also worth noting that on a personal level, if a gift is made, the annual exclusion does not extend past December 31 in any given year. For those in business an annual review of your strategic plan, succession plan, and having your business valued are considerations you should take seriously before the New Year.