Slideshow Advisors' Exclusive Year-End Tax Tips

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  • December 09 2015, 4:28pm EST
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Advisors' Exclusive Year-End Tax Tips

Financial planners have the opportunity to guide their clients with efficient tax strategies in the final weeks of every year. The following tips from advisors and tax experts provide some of the more sophisticated moves that can help your clients make better choices and meet critical deadlines before 2016 starts.
Click through our slideshow for these key insights to beef up your expertise on tax planning that will make the difference for your clients. Click here to see a single-page version.- Ralph R. Ortega

Advisors' Exclusive Year-End Tax Tips

Financial planners and tax experts offer their unique strategies for year-end planning that can help your clients.

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Advisors' Exclusive Year-End Tax Tips

Your client may not need to pay this tax on their business income if they participate in the business enough to not be considered a passive investor, according to accounting firm Grant Thornton. Participation is almost any work performed in a business as an owner, manager or employee as long as it is not an investor activity. Even so, your client must document their activities. The IRS will not let them make ballpark estimates after the fact. Make sure they document the hours they’re spending with calendar and appointment books, emails and narrative summaries.

Advisors' Exclusive Year-End Tax Tips

Financial planners and tax experts offer their unique strategies for year-end planning that can help your clients.

Advisors' Exclusive Year-End Tax Tips

Financial planners and tax experts offer their unique strategies for year-end planning that can help your clients.

Content Continues Below


Advisors' Exclusive Year-End Tax Tips

"The Solo 401(k) is a great way for sole practitioners to save a lot for retirement (up to $53,000 in 2015 plus over age 50 catch up). But unlike IRAs or SEP IRAs, the deadline to open these accounts is Dec. 31st. Your client may make contributions to the plan up to their tax filing date," says Delia Fernandez of Fernandez Financial Advisory.

Advisors' Exclusive Year-End Tax Tips

Financial planners and tax experts offer their unique strategies for year-end planning that can help your clients.

Advisors' Exclusive Year-End Tax Tips

"You can’t carry over unused exclusions from one year to the next. The transfers also may save family income taxes where income-earning property is given to family members in lower income tax brackets who are not subject to the kiddie tax," according to Thomson Reuters Checkpoint, a research and technology provider within the tax & accounting business of Thomson Reuters.

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Advisors' Exclusive Year-End Tax Tips

For clients who split their time in two different states throughout the year, now is an excellent time to consider where they may be taxed as a resident for 2015, according to Grant Thornton. To make it more likely that the high-tax jurisdiction will respect the move and not continue to tax you as a resident, you should track the number of days your client is spending in each jurisdiction. Generally, if they reside in a state for 183 days or more, that state will assert residency and the ability to tax all of your income. Furthermore, if they move to a new state but maintain significant contacts with the old state (including driver’s license, residences, bank accounts and the like), you could run the risk of being taxed as a resident in the old state.

Advisors' Exclusive Year-End Tax Tips

Financial planners and tax experts offer their unique strategies for year-end planning that can help your clients.

Advisors' Exclusive Year-End Tax Tips

Financial planners and tax experts offer their unique strategies for year-end planning that can help your clients.

Content Continues Below


Advisors' Exclusive Year-End Tax Tips

"This seems to be one that is over looked by clients because they may not be fully aware of the catch-up rules and miss out on the extra deferral," says advisor Nick Barringer of Alpha Financial Advisors.