Important Year End Tax Planning Tips by Syed Nishat & Aadil Zaman of Wall Street Alliance Group

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|Dec 19|magazine16 min read

NEW YORK, Dec. 17, 2019 /PRNewswire/ -- 2019 is about to end with a large gain in the stock market and there is still time to implement some tax planning. Here are important tax planning tips for 2019 year-end to help you avoid any last-minute anxiety. 

  1. QBI (qualified business income) Deduction qualification: The Tax Cuts and Jobs Act of 2017 (TCJA) introduced a new tax break for owners of many pass-through businesses. Architects and engineers are generally eligible for the 20% deduction of qualified business income; subject to 50% of W-2 wage. The W-2 must be adjusted by December 31st to get the maximum QBI.
  2. Establishing Profit Sharing and Defined Benefit Plan: Although the deadline to adopt a Safe Harbor 401k plan has passed, there is still time to establish a 401k profit sharing and Defined Benefit (DB) plan for 2019. A self-employed individual who is age 50 or older can contribute up to $193,000 into a DB plan and it is completely tax deductible. The contributions are not due until the business tax filing deadline which could be as late as September 15th if an extension is filed. 
  3. Charitable Trust: Many families will not be able to itemize deductions since the standard deduction for a married couple filing jointly has nearly doubled to $24,400. One way to qualify for itemized deductions in 2019 is to lump the next few years charitable contributions into a donor fund or charitable lead/retainer trust by December 31st. The funds remain in your control and you can get a larger deduction while still donating to charities of your choice in the future. 
  4. Tax Harvesting: S&P 500 is near a record year to date high and many actively managed funds will pay substantiable taxable dividends and capital gains distributions in December. Consult your financial advisor about tax harvesting to minimize taxable gains, especially if they are short term.  
  5. 529 Contribution: Many states allow residents to deduct a certain amount from their state tax liability for 529 contributions made during the year. For example, contributions made to a New York 529 plan of up to $10,000 per year by a married couple filing jointly, are deductible in calculating New York taxable income. To get the deduction in 2019 this contribution must be made by December 31st.
  6. FSA (Flex Saving Account) Funds: It is important to use the FSA contribution made during the year and submit a reimbursement for the amount not to be forfeited. You can rollover up to $500 of unused funds to the following year.
  7. Funding the Employer-Sponsored 401k Plan: If you are contributing to an employer-sponsored 401k plan, you can contribute up to $19,000 plus $6000 as a catch up if over the age of 50. The deadline to reflect the deferrals in W-2 is December 31st.
  8. Gift to your children or grandchildren: Married couples can gift up to $30,000 ($15,000 each) to their heirs without incurring a gift tax return in 2019. It's a great way to reduce your taxable estate and pass wealth to the next generation. The gift must occur by December 31st to qualify for the 2019 tax-year. 

"It's very important to speak to your financial advisor before year-end for tax planning as rules and regulations are constantly changing" said Syed Nishat, Senior Partner at Wall Street Alliance Group. "Everyone's situation is unique and year-end tax planning involves coordination with CPA, attorney and actuary which a qualified Financial Advisor can provide" said Aadil Zaman, Senior Partner at Wall Street Alliance Group.

About Wall Street Alliance Group: Wall Street Alliance Group is a nationally recognized wealth management firm headquartered in Manhattan, New York. The firm operates on a fiduciary capacity serving high-net-worth clients and is on a mission to empower first-generation immigrants to achieve financial well-being. Wall Street Alliance has a team of advisors with expertise in areas such as tax planning, estate planning, asset protection, portfolio management, 401(k) plans, Defined Benefit plans, Special Needs plans, physician financial planning and trust services. Please visit www.wallstreetag.com.

The opinions and forecasts expressed may not actually come to pass. This information is subject to change at any time, based on the market, the political environment, and other conditions and should not be construed as a recommendation of any specific security or investment plan. Past performance does not guarantee future results.

Securities offered through Securities America, Inc., member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Wall Street Alliance Group and Securities America are separate companies.

Securities America and its representatives do not provide tax advice; therefore, it is important to coordinate with your tax advisor regarding your specific situation.

Media Contact:
Joann Woodrops
212-402-4272
[email protected] 

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SOURCE Wall Street Alliance Group