TAX TIPS

If you are interested in learning how you can save on your taxes, review the strategies and examples below, as well as over 100 topics on our FAQ page.

We will continue to update this page to add more details and to keep up with changing tax laws.

If you have any specific tax topics you would like us to explain on our website or Facebook page, please email us your suggestions!

Personalized Tax Planning

Contact us to schedule a Tax Planning Appointment if you want to discuss specific strategies, need help to determine which strategies you can take advantage of, or want a projection of your tax return, to help you make decisions between now and the end of the year. See pricing on our Tax Planning page.

A Tax Planning Appointment may be a good fit if:

• You want to implement some of the strategies listed below, but need help to determine how to apply them to your specific situation.
• You started a new business recently.
• You have money to save or invest but are unsure of the most tax-friendly strategy for your situation.
• You are considering selling your house and unsure of the tax consequences.

May not be a good fit if:

• All your income is from W-2 wages or retirement income, and you don’t have room in your budget to save or invest.
• Tax planning will not affect any decisions you make between now and the end of the year.

Tax Tips for Individuals

1. Charitable donations – Accelerate your tax deduction by using a Donor Advised Fund
2. Charitable donations – Donate appreciated securities/assets to avoid tax on gain and still take deduction for full value
3. Itemized deductions – Bunch deductions (especially donations) into every other year to take advantage of standard deduction as well
4. HSA – Maximize the tax benefit by fully funding your HSA and investing within the account, then pay for medical expenses with other money and document carefully. The HSA balance will grow tax free and you can reimburse yourself from the account at any time in the future. If it grows beyond your medical expenses you can always withdraw it after age 65 and pay regular tax like an IRA. When you contribute as an employee you not only save federal and state income taxes, but payroll taxes as well.
5. Retirement Saver’s Credit – If your income is under $73,000 (married) you can get a credit based on your retirement savings
6. Backdoor Roth IRA contributions for income over $218,000 (married). Make a nondeductible traditional IRA contribution, then convert to Roth despite being over the normal income limit.
7. Roth conversion – If you have money in a traditional IRA and are retired or your income is lower than normal this year, you may save tax in the long run by choosing to pay some tax now to convert your funds to a Roth.
8. 529 Educational Savings Plan – Go to my529.org to save for your children’s or grandchildren’s college educations. Get a 5% Utah credit for contributions and investments grow tax free.
9. Tax gain harvesting – If your income is under $117,150 (married) and you have long-term appreciated securities in a taxable account
10. Credits for education, solar, child care, adoption, and subsidized health insurance

Example. Donor Advised Fund/Bunching itemized deductions. – Taxpayer has income of $160,000 and donates $16,000 annually. Other itemized deductions include state income tax and property taxes of $10,000 and mortgage interest of $10,000. Total itemized deductions each year are $36,000. In 2023, taxpayer donates the regular $16,000 to charity plus $32,000 to a donor advised fund, which is then donated from that fund to charity in each of the next two years, so the charity receives the donations on the same schedule as before. 2023 itemized deductions are increased by $32,000 saving $7,040 in federal tax. Without donations in 2024 and 2025, the standard deduction of $27,700 is taken, so federal tax is higher by $1,826 (22% tax x ($36,000-$27,700)). Net tax savings over three years = $3,388.

Tax Tips for Real Estate Investors

1. Cost segregation to take more depreciation sooner and to reduce tax rate on sale of property. Most beneficial for real estate professionals with commercial buildings or owner-occupied commercial buildings.
2. Dealer vs. investor considerations
3. Passive loss limitations
4. Active rental real estate status
5. Real estate professional status
6. Rental activity grouping rules
7. Sell rental you previously lived in to your own S corporation to capture residential exclusion
8. 1031 exchange and installment sale options to reduce tax on sale

Example. Taxpayer converts personal residence to a rental property but wants to also take advantage of the capital gains exclusion. Taxpayer purchased home in 2014 for $250,000 and lived there until 2021, then started renting it out. In 2023 home appraises for $550,000 and taxpayer sells to own S corporation and continues to rent. Taxpayer reports sale on personal return with a small amount of taxable depreciation recapture, and a $300,000 tax-free gain because taxpayer owned and lived in it for 2 out of the last 5 years. The new S corporation reports a new rental with a basis of $550,000 to start depreciating.