- Review your tax return to assess how much of your income is subject to taxes. Looking at your taxable income (e.g., adjusted gross income minus deductions) will keep you better informed about potential impacts as new tax legislation occurs.
- If you have investments in taxable accounts, you may want to assess your long-term investing plans and see if tax-loss harvesting makes sense for you.
- If you are concerned about increases in your tax bracket as soon as next year, consider accelerating some income into 2020 to pay the tax on it in the current year.
- If you are considering making a large charitable contribution, evaluate the timing of it in light of how the value of the potential tax deduction would change if future tax rates increase or if limits change on charitable deductions.
- If you have concerns about your tax bracket increasing in retirement, it might be a good idea to consider shifting some of your tax-deferred savings now into a Roth IRA, which will have tax-free growth potential and will not be subject to required minimum distributions (RMDs), helping to lower your taxable income in the future.
- If you are concerned about the estate tax exemption changing to a lower amount than the current $11.58 million per individual, look at your estate plan and see if you want to make any changes.
To prepare for potential changes, you may want to consult with a tax advisor to assess your current situation and then decide if you need to change your long-term financial strategy. If you are concerned that tax rates will rise in the future, you may want to consider taking advantage of current rates in a variety of possible ways.
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