With three months left in 2016, is it too early to think about your 2017 tax strategies?
No. Now is the time to begin tax strategies to reduce your 2016 and 2017 tax bills. Sarah O’Brien argues in her article on CNBC, “Seriously: ‘Tis the season to think about tax strategies”,
that tax planning should be a year-round activity, but especially before year-end.
Specifically, contributing to retirement accounts such as a Traditional IRA and 401(k) could reduce your taxable income. In 2016, you can contribute up to $5,500 ($6,500 if over 50) with a Traditional IRA and $18,000 ($24,000 if over 50) with a 401(k). Making charitable contributions and taking an investment loss to offset a capital gain are other strategies mentioned in the article. In addition, for owners of a Traditional IRA over age 70 ½ making sure you comply with required minimum distributions is important.
If you have contributed fully in 2016 to your self-directed IRA, or you are interested in opening a new self-directed IRA, now might be the right time.