Important Year-End Tax Planning Ideas for Individuals and Businesses


Leading financial advisor Cary Stamp, CFP® provides five year-end tax planning ideas: three for individuals, and two for businesses. Ideas include tax loss selling, avoiding high mutual fund capital gains, bunching deductions on Donor Advised Funds, end of year equipment or vehicle purchases, and maximizing retirement plan contributions.


I’m Cary Stamp and this is a Principled Wealth Moment. Today I’d like to share a little bit about what we’re sharing with our clients about year- end tax planning, and I have three suggestions for individuals and two suggestions for business owners.

My first suggestion for individuals is: any time you are looking at your portfolio at the end of the year, that you look for opportunities to take what we call tax losses. Most people will have a number of different investments and if you have some that have gone down in value and others that have gone up in value, many times we will sell the things that have gone down in value at the end of the year so that you can write those things off against your other capital gains. You can also write off up to $3,000 worth of these tax losses against your ordinary income on your tax returns. That could save you some significant money.

Number two strategy is that we just suggest that you look at your mutual fund gain distributions. Mutual funds are required every year to pay capital gains distributions from what they earn or what they generate in their trading profits, and in many cases these mutual fund capital gain distributions can throw you into the next tax bracket. One of the things that we highly recommend is that you consider owning funds that are tax efficient, that don’t throw out a lot of capital gains every year. I’ll talk more about that in another blog.

The third thing that we suggest is what we call the bunching deduction strategies. Let’s say that in a given year, if you have the ability to accelerate some tax deductions that can be itemized on your tax return, that you should think about doing this. One of the easiest ways to bunch deducations, and I will be presenting this idea in a longer segment, is what we call a Donor Advised Fund, which allows you to group your charitable contributions and make them all in one year. Oh, and also be able to take the tax deduction.

For business owners, I have two other ideas. The first one is an end of the year equipment or vehicle purchase. Most people don’t realize this, but if you own a business and you purchase a vehicle that’s over 6,000 pounds gross weight, you can depreciate that entire vehicle in one year to the percent that you use it for your business. So if it’s primarily for your business and you buy yourself an SUV, you could take a substantial tax write off in one single year.

And then the second business strategy is maximize your retirement plans. You should be adding money into your retirement plan for yourself, for your spouse if they’re on the payroll, for your adult children, if you can conceivably put them on the payroll as well, and then making massive contributions if you can, to the profit sharing component of your retirement plans.

These are some of the strategies for individuals and businesses to save money at the end of the year on taxes. If we can be of further assistance,

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