Tax Planning Strategies Before the End of TCJA Tax Cuts

September 10, 2024
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Several tax cuts introduced by the Tax Cuts and Jobs Act (TCJA) in 2017 are facing expiration. For investors and business owners, proactive year-end tax planning is essential to maximize benefits and minimize liabilities ahead of these potential changes in tax policy.

Key Tax Planning Strategies

Here are some of the strategies you can implement to prepare for changes if the TCJA tax cuts are eliminated:

Accelerate Income

Consider recognizing income in the current year to take advantage of lower tax rates. This strategy is particularly relevant for high-income earners who may face higher rates if the TCJA provisions expire in 2025.

Maximize Tax Deductions

Utilize available deductions before potential changes in tax law, such as charitable contributions and business expenses. Accelerating these deductions can reduce taxable income and lower your tax burden.

Retirement Contributions

Maximize contributions to retirement accounts to reduce taxable income and benefit from tax-deferred growth. Contributions to 401(k) plans, IRAs and other retirement accounts can provide significant tax savings now while supporting long-term financial goals.

Estate Planning

Review and update estate plans to take advantage of current gift and estate tax exemptions. The TCJA increased the estate tax exemption, but this provision may revert to lower levels. This makes it essential to consider estate planning strategies now.

By staying ahead of potential legislative changes, individuals and business owners can optimize their tax positions and secure financial stability. Proactive planning can provide significant savings and ensure readiness for any shifts in the tax landscape. Working with a tax professional can offer valuable insights and strategies tailored to your specific situation, helping you navigate the complexities of tax planning in a changing environment.

For help with all your tax planning and wealth management needs heading into the final quarter of 2024, contact Illumination Wealth today.

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