Year-end Tax Planning Strategies for Individuals 

Jackie Himes, CPA
Focused on You. Dedicated to Your Success.
December 2, 2019

With only a few weeks left in 2019, individuals need to take a look at tax planning strategies to help them save money on their tax obligation. Now is also a good time to start planning for next year. 

Here’s a look at some of the issues we’re recommending clients consider as they begin their end-of-year review.

Key tax considerations you should be aware of
Taxpayers began seeing the real effects of the Tax Cuts and Jobs Act of 2017 when they filed their returns in 2019. This legislation has made a profound impact on many taxpayers and has created new planning opportunities. Here are a few items to note: 
  • Deductions — Due to the increase in the standard deduction, many individuals did not itemize their deductions last year. While this may seem like a simplification for some, there are still strategies to consider. For example, we can help you navigate whether it makes sense to “bunch” deductions, such as charitable contributions.
  • Withholdings — You may have experienced a surprise when you filed your tax return. This was likely because your withholding adjustment may not have reflected your actual tax situation. Now is a great time to look at your projected tax. Doing this will help avoid unwanted penalties/interest as well as help you plan for cashflow needs. There is time to adjust your withholding before the end of the year. 
  • Qualified business income deduction — If you own a business or a rental property, you likely discussed this deduction (a potential 20% deduction on business income) with us last year. There are several reasons why year-end planning is particularly important for this deduction. The deduction can be limited based on taxable income, which means that planning for minimizing income can be important. Also, for rental property owners, there are requirements that may need to be satisfied before the end of the year for you to take this deduction. We can help you navigate this complexity. 
  • Divorce settlements — If you had a divorce or separation that recently was finalized, any alimony paid or received will not be deducted or included in income. Contact us if you have questions about how this will affect your tax liability. 
  • Kiddie tax — Based on changes in the tax law, the tax on children’s investment income (known as “kiddie tax”) is now calculated at the trust and estate tax rates. There can be alternatives to filing a separate tax return based on the amount and type of income, and we can help you determine the best strategy. 

The Affordable Care Act (ACA) and your taxes
Recent tax law changes repealed the penalty that the ACA imposes on individuals who do not have health insurance. However, other aspects of the ACA still are in place. Contact us if you have questions about how this affects you. 

Be sure your retirement planning is up to date.
We recommend you review your retirement situation at least annually. That includes making the most of tax-advantaged retirement saving options, such as traditional IRAs, Roth IRAs, and company retirement plans. We can help you determine whether you’re on target to reach your retirement goals. 

Year-end planning equals fewer surprises.
There are many other opportunities to talk about as year-end approaches. Many times there may be strategies such as deferral of income, prepayment of expenses, etc., that can help you save taxes. We are here to help. 

Whether it’s working toward retirement or getting answers to your tax and financial questions, we’re here for you. As always, planning ahead can help you minimize your tax bill and position you for greater success. 

Feel free to call any member of our team to discuss your particular situation at 610-828-1900 (PA) or 732-341-3893 (NJ). You can contact Jackie Himes, CPA, CPA, director – tax services at or me at . We are always happy to help. We are here to help. 

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

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).