Adapted from 12 Year-End Tax and Financial Planning Tips from the AICPA 

December 5, 2018

NEW YORK (December 5, 2018) – As 2018 comes to an end, so does the window of opportunity to take advantage of certain tax and financial planning strategies. To help Americans be best positioned come Tax Day 2019, members of the American Institute of CPAs (AICPA) share the following 2018 year-end tax and financial planning tips. 

1. Bunch Charitable Contributions
Deadline: December 31, 201

Quote: “For those individuals who are considering the standard deduction instead of itemizing, consider bunching your charitable contributions into alternate years if it will enable you to take the standard deduction one year and itemize the next. If you do not want to give the money to charity at one time, contribute to a donor advised fund and then make the distributions to charity over time.” – Lisa Featherngill, CPA/PFS member of the AICPA PFP Executive Committee

2. Give Appreciated Stock to Charity
Deadline: Stock received by December 31, 2018 

Quote: “This is a good time to rebalance your portfolio and capture some of the stock market gains of the last few years.  Consider donating some appreciated stock to charity.  This has the double benefit of a charitable deduction for the full market value of publicly traded stock (without recognizing the gain) and a partial rebalancing of your portfolio if you are over-weighted in stocks.” – Lisa Featherngill, CPA/PFS member of the AICPA PFP Executive Committee 

3. Donate Required Minimum Distribution to Charity
Deadline: Distribution made by December 31, 2018 

Quote: “Taxpayers age 70 ½ or older who need to withdraw their required minimum distribution (RMD) for the year should consider leveraging a Qualified Charitable Distribution (QCD).  The taxpayer may direct the distribution of up to $100,000 each year from their IRA to one or more qualified charitable organizations.  This distribution counts toward satisfying their RMD and will not be taxable to the individual.  This is a smart way to gain an effective deduction for charitable gifts without the need to have itemized deductions in excess of the newly increased standard deduction.” – Robert Westley, CPA/PFS member of the AICPA PFS Credential Committee 

4. Gift to Heirs Today to Reduce Future Estate Tax
Deadline: December 31, 2018 

Quote: “The year-end is a great time to make annual exclusion gifts. For those looking to reduce their estate tax exposure, individuals can give up to $15,000 to an unlimited number of beneficiaries per year without decreasing their lifetime estate tax exclusion amount or paying a gift tax. These planning opportunities will be lost once the year ends and should be top of mind to review now.” – Robert Westley, CPA/PFS member of the AICPA PFS Credential Committee 

5. Establish a Donor Advised Fund
Deadline: December 31, 2018 

Quote: “A donor-advised fund is a charitable giving vehicle administered by a public charity created to manage charitable donations on behalf of organizations, families, or individuals. To participate in a donor-advised fund, a donating individual or organization opens an account in the fund and deposits cash, securities, or other financial instruments. They surrender ownership of anything they put in the fund, but retain advisory privileges over how their account is invested, and how it distributes money to charities..”