AKM 2016-2017 Tax Planning Guide

Planning for sustained prosperity.

Click here to download AKM Tax Guide 2016-2017 [pdf]

A number of tax breaks were finally made permanent in 2015, making tax planning easier in 2016 than in recent years.  However, some popular breaks were extended only through the end of 2016 and there is always the possibility that the law will change even for “permanent” tax breaks.

This year’s tax guide provides a high level blueprint for planning strategically and putting the tax laws to work for you.  It is packed with charts to summarize complex information and highlights both changes in tax law and ways that newer provisions such as NIIT (net investment income tax) interact with other aspects of the law.

As always, we provide this annual tax guide – created by a trusted third party provider – to give you some critical tax planning tools and information.  Please let your AKM CPA know what piques your interest, and we’ll be glad to schedule a follow up conversation to discuss your personal situation and applicable strategies.


Year-to-date review [Page 2] – The review summarizes Alternative Minimum Tax (AMT) triggers and planning steps for avoiding or reducing AMT either in the current tax year or in the next tax year.  It also examines strategies for accelerating and deferring income, handling miscellaneous deductions and getting the biggest tax benefits from health care expenses. Case study: Bunching medical expenses to save taxes.

Executive Compensation [Page 6] – This section reviews strategies for structuring stock-based portions and deferred compensation portions of executive compensation packages and how each one affects both the company’s tax liability and the executive’s.  Case study:  Watch out for falling stock prices after exercising ISOs.

Investing [Page 8] – This article provides an overview of capital gains tax rules, plus pitfalls and various proven strategies for avoiding them.  Case studies  How to qualify for the 0% capital gains rate; Tax-exempt or taxable bonds?  It’s a question of yield.

Real Estate [Page 12] –  This review provides some guidance for smart financial planning and tax savings in light of the uncertain recovery of the real estate market. It highlights a new energy credit available to homeowners who make qualified energy improvements. It also covers tax rules governing home rentals, home sales, real estate activity and depreciation, as well as tax-deferral strategies for investment property.

Business ownership [Page 14] –  Planning is critical if you own a business.  This article covers retirement savings options, exit planning, sale and acquisition.

Charitable giving [Page 16] – Carefully planned and executed charitable giving is a great tool for reducing tax liabilities while supporting cherished causes.  This articles surveys a range of strategies, from cash and stock donations to various trust structures.  It also highlights a new rule that allows taxpayers age 70.5 and older to donate up to $100,000 from the IRA per year to charity.

Family and education [Page 18] – It’s never too early to start personal financial planning, and families can save significantly on their tax bills through IRAs for teenagers, education savings plans and strategic gifting.  Case study:  A 529 plan can be a powerful estate planning tool for grandparents.

Retirement [Page 20] – The amount of income taxpayers can contribute to tax-advantaged retirement accounts is limited.  This can be particularly challenging for high income taxpayers.  This article discusses how to get the most from your retirement plan contributions from both tax and retirement planning perspectives, as well as a survey of when it makes sense to take early withdrawals, what to do with your retirement fund when you leave a job and making sure you take the required minimum distributions after age 70 ½.  Case study:  To convert or not convert to a Roth IRA.

Estate planning [Page 22] – This article provides an overview of federal estate and gift taxes, along with some tips for tax smart giving and the strategic use of trusts and insurance.  It also reviews a 2015 requirement that large estates report fair market values of inherited property or be subject to a hefty 20% penalty.

Tax rates [Page 24] – 2015 individual and corporate income tax rate schedules.

This entry was posted in Tax Guides.