6 Strategies to Help Minimize Taxes
Focused on You. Dedicated to Your Success.

Here are six tax planning strategies to help minimize your taxes to consider now that we are halfway through 2017:


  1. Watch Your Marginal Tax Rate – The difference between your marginal tax rate and effective tax rate will generally show you if an extra dollar(s) of income will push you into a higher tax bracket. If so, defer income or accelerate deductions to avoid paying taxes at a higher rate.
  2. Shift AMT Triggers to Another Year – If you are going to be subject to the alternative minimum tax (AMT) this year, see if one or more of the items causing you to be over the AMT threshold can be changed to a different year to avoid paying the AMT. The AMT thresholds for 2017 are:
           • $54,300 for single filers
           • $84,500 for married taxpayers filing jointly
           • $42,250 for married taxpayers filing separately
           • $24,100 for trusts and estates
  3. Offset Capital Gains with Tax Loss Harvesting – If you are going to realize a capital gain on a qualified investment, you can offset short-term capital gains with short-term losses and long-term gains with long-term losses. Consider if you currently have a capital loss carryforward (either short- or long-term) that could be used to shelter gains.  Please note that if you repurchase the same or a similar security within 30-days of the sale, the “wash rule” prohibits a tax-deductible loss on the security.
  4. Reduce or Avoid Taxable Income – Reduce your adjusted gross income (AGI) by deferring compensation or contributing to an IRA or retirement plan. Maximize tax deductions such as charitable contributions or mortgage interest to offset income. 
  5. Make Charitable Gifts with IRA Funds – The Protecting Americans from Tax Hikes (PATH) Act of 2015 allows taxpayers to make qualified charitable distributions from IRAs. If you are 70 or over, you can make tax free distributions directly from your IRA or Roth IRA to a qualified charity.  In some cases, excluding IRA distributions from your AGI can eliminate or minimize the 3.8% surcharge on investment income and the phaseout of itemized deductions.  The maximum donation is limited to $100,000 per person.
  6. Consider a Roth IRA – Although Roth IRAs are funded with after tax dollars, earnings are tax-deferred and withdrawals are tax-free. In addition, Roth IRAs are not subject to the minimum annual withdrawals required from traditional IRAs in retirement. Please note that a single taxpayer making more than $133,000 or married taxpayers making over $196,000 are prohibited by law to directly fund a Roth IRA. 


Let us know if you got married, divorced, had a child, retired or something else has changed. Certain events can impact your taxes.


There are many tax planning strategies you should consider before year-end. Feel free to call us at 610.828.1900 to discuss your situation. Contact either Michael Sexton, CPA, CCIFP, Director – Tax Services at Michael.Sexton@MCC-CPAs.com or me at Marty.McCarthy@MCC-CPAs.com. We are always happy to help.


Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code.  We strongly advise you to seek professional assistance with respect to your specific issue(s).  


Martin C. McCarthy, CPA
Managing Partner
McCarthy & Company, PC