It's Time to Start Planning for the 2017 Tax Season
At the end of every calendar year, you should take these steps to try and save on future taxes.

It's hard to think about planning ahead for 2017 taxes when you haven't even thought yet about filing for 2016. But the best time to prepare for the next year's tax season is actually before the current year-end.
Here are some tax-planning strategies to act on at the end of every year. Taking these steps may reduce your tax obligations down the road.
Manage Tax Brackets by Deferring Income
Being placed in a higher income-tax bracket can cost you tens of thousands of dollars. Deferring or reducing income is a way to avoid paying more money if you're on the bracket threshold. Remember that tax brackets are graduated, so only the income that exceeds the threshold for the higher bracket is taxed at the higher rate.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
You could consider the following two strategies to avoid a higher tax bracket. (Consult with your tax professional to determine the best strategy for your situation.)
Maximize your pretax contribution to a health savings account (HSA). A HSA is used with a high-deductible healthcare plan to save for qualified medical expenses. For 2017, a family may contribute up to $6,750 ($3,400 for individuals), and if you're 55 or older, you can contribute an additional $1,000. Amounts in the account not spent in the event of an account holder's death can transfer to a spouse on a tax-free basis or another named beneficiary as estate income.
Make a donation to charity from your individual retirement account. Individuals age 70½ or older are required to take a minimum distribution from their IRAs. These distributions are considered taxable income. To avoid this, you may instead give up to $100,000 tax-free directly from an IRA to a qualified charity, which you can search for on the IRS website.
Benefit More from Your Charitable Giving
In addition to the above IRA point, there are several benefits to charitable giving when it comes to income taxes. Here are a couple of tips of note before the year-end:
Itemization. Only people who make itemized deductions on income tax returns can deduct charitable contributions, and the deduction is not available to those who claim the standard deduction. If you do choose to itemize deductions, you must have records to substantiate your donations. Notably, all gifts worth $250 or more require a written acknowledgment from the charity describing the gift, date and its value.
Timing. For gifts sent by mail, the envelope must be postmarked by Dec. 31 in order to be deducted on 2016 returns. For gifts of marketable securities, the donor can deduct the full fair market value of the stock and also avoid paying capital gains tax on the appreciation. In contrast to the "postmark rule" above, however, the asset must be delivered to the charity by year-end.
Avoid the Alternative Minimum Tax
The alternative minimum tax (AMT) was enacted to prevent high-income taxpayers from reducing their tax obligations through various legislative loopholes. It is a parallel method of calculating tax liability that expands the amount of taxable income by adding income items that are traditionally tax-free and removing or reducing many deductions allowed under the regular tax system.
The IRS has increased the AMT exemption for 2016, which is the amount taxpayers can deduct from income calculations when determining their potential AMT liability. For individuals, the 2016 exemption begins to phase out at $119,700; for married couples filing jointly, it begins at $159,700.
The best thing to do is to look at your 2015 tax return and determine how close you came to paying the AMT. Then, review your 2016 items that may increase it. Conversely, if you paid the AMT in 2015 but do not need to in 2016, you may be eligible to claim a tax credit for certain items on your 2016 taxes.
Respond to Life Changes
It is good practice to always review your account beneficiaries and trust agreements at the end of the year. For example, the birth of a new grandchild may require an update to your accounts. Other big changes—such as starting or selling a business, buying or selling property beyond your personal home or investments that result in sales, losses or gains—can also influence your tax status.
You should also review your estate plan and documents every several years not only to update family changes, but also to stay current with tax code changes. While there is nothing significant affecting your 2016 filings, tax legislation changes surprisingly often. And with a new president and Congress on the horizon, it doesn't hurt to keep an eye out for new laws or other adjustments, and be ready to make changes to your own filing accordingly.
Beyond that, taking regular stock of your income streams, making the deadlines and anticipating your return in advance of tax season will make it easier when the time to file rolls around each year.
David Terrell is a region manager for The Private Client Group of U.S. Bancorp Investments. He has 20 years of financial planning and wealth management experience, managing a very culturally and economically diverse region.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

David Terrell is a region manager for The Private Client Group of U.S. Bancorp Investments. He manages the financial services activity in Southern California, Arizona and Nevada. He has 20 years of financial planning and wealth management experience, managing a very culturally and economically diverse region.
-
Kiplinger News Quiz, September 5, 2025
Quiz 401(k)s, Google's Alphabet and tariffs on luxury goods all made Kiplinger headlines this week — but why? Test your knowledge of this week's financial news.
-
What Dave Ramsey and Caleb Hammer Taught Me About Handling Money
From Ramsey’s strict discipline to Hammer’s blunt reality checks, their lessons reveal how to save, invest and prepare for the future.
-
Tactical Roth Conversions: Why 2025-2028 Is a Critical Window for Retirees
The One Big Beautiful Bill (OBBB) extended today's low tax brackets, but they may not last. Here's how smart planning now can prevent costly tax surprises later.
-
Ready to Retire? It's Not Too Late to Convert to a Roth IRA
Millions of Americans are turning 65 this year. If you're retiring soon, don't dismiss the idea of a Roth conversion — it could still be a smart move even now.
-
I'm a Financial Adviser: Three Things You Will Wish You Did Before the Fed Cuts Interest Rates
With potential interest rate cuts on the horizon, you might want to lock in today's higher yields and consider adjusting your asset allocation.
-
How Will the One Big Beautiful Bill Shape Your Legacy?
The One Big Beautiful Bill Act removes uncertainty over tax brackets and estate tax. Families should take time to review estate plans to take full advantage.
-
When You Need Capital Quickly, Think 'Ready, Set, Fund': A Financial Adviser's Strategy
Investors must be able to free up cash to meet short-term needs from time to time. This strategy will help you access capital without derailing your long-term goals.
-
I'm an Estate Planner: Moving Family Assets to a Safe Haven Abroad Could Be a Huge Headache for Your Heirs
In troubled times like these, wealthy clients may seek financial refuge outside of the U.S. But that could cause more tax and estate problems than it solves.
-
Fall Is Tax Time? Yes! Act Now to Make Needed Adjustments
Review your withholdings, contribute to tax-saving HSA and FSA accounts, manage a bonus' impact and adjust for major life events such as weddings and job changes.
-
1031 Exchanges Aren't Just for Big Real Estate Deals: An Expert's Playbook for Regular Property Owners
One of the biggest mistakes property owners make is not realizing they're eligible for tax deferral through a Section 1031 like-kind exchange.