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Give Yourself a (Tax) Break this Holiday Season

Give Yourself a (Tax) Break this Holiday Season

| November 22, 2017
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Give Yourself a (Tax) Break this Holiday Season

For most people, the holiday season represents the busiest time of the year as multiple obligations,
errands, deadlines and social engagements converge to place increased demands on your time and
your wallet. You need a break, and in many cases, so do your finances. Below are some smart ways
to give to family, friends and the organizations you support this holiday season that not only offer tax
benefits but don’t require time spent searching for a parking space at the mall.

Consider the following for:

Adult children: the IRS allows you to gift up to $14,000 per individual free of gift or estate tax

Grandchildren: make a contribution to a grandchild’s 529 Education Savings Plan; earnings are not
subject to federal tax and generally not subject to state tax when used for the qualified education
expenses of the designated beneficiary

The friend who has everything: consider a tax-deductible contribution in their name to a charitable
or other not-for-profit organization they’re passionate about

Charitable organizations you support: make a tax-deductible year-end cash contribution or
donate securities (such as shares of stock), or real property such as a car or boat

Qualified Charitable Distributions (QCDs): permit a direct transfer of up to $100,000 from an IRA
to a qualified charity (you must be age 70 ½ or older and subject to RMDs to be eligible)

Don’t forget to give a tax-advantaged gift to yourself. As the powers that be battle it out over tax
reform in Washington, D.C., there’s been talk about adjusting future 401(k) contribution limits. While
it’s unknown at this writing whether changes to pre-tax 401(k) contribution limits will remain on the
table, we do know that 2017 contribution limits remain at $18,000 for those under age 50. And if
you’re age 50 or over, you have an opportunity to make an additional $6,000 catch-up contribution
for a total contribution of $24,000. But you only have until December 31, 2017 to maximize your
401(k) plan contributions for the current tax year.

Contributing the maximum allowable amount to your 401(k) is one of the best ways to help build
wealth over time. If you’re not eligible to participate in a 401(k) or similar employer retirement plan,
consider contributing to a traditional or Roth IRA. If you’re eligible to contribute, you can make taxyear
2017 IRA contributions up until the 2017 tax filing deadline which is April 17, 2018.

If you’d like to learn more about charitable giving, philanthropic planning or other tax-advantaged
wealth planning strategies, please contact the office to schedule time to talk.

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