While it is true that the end of the year is going to be here in less than two weeks there is still time for you to make some changes to decrease your tax bill. Today, we are covering how to decrease your tax bill by the end of the year.
Give Securities to Charity
You may have enjoyed doing the ALS Ice Bucket Challenge this year but now it is time for you to donate your appreciated securities instead of being tricked into writing a check. When you give your securities to charity, you are able to receive a larger tax break. This is because when you donate appreciated security you have owned more than a year to charity, you are able to deduct their value based on their worth when you give the gift. You skip capital gains taxes and the charity does not have to pay them either. However, keep in mind that not all charities can accept appreciated securities as donations, when you are thinking of heading to your favorite cause.
Give Securities to Family Members
If your adult children or parents are in the 10-15 percent tax bracket and you are not, give them appreciated securities as a gift for Christmas. When they decide to sell them, they will be able to do so tax free where as you would be taxed at 23.8%. The best part is they do not have to wait an entire year before selling because the long-term capital gains rate carries over the amount of time that you held them. If you want to avoid filling out a gift tax return, you can give cash, securities or other property up to a $14,000 value without having to fill out the gift tax return.
Make these tax moves before the end of the year to ensure that your tax bill is more affordable! Thank you for reading our Seattle CPA blog post! Have a Merry Christmas!