Eleven Tax-Savers for the 11th Hour

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Ready or not, 2017 is almost here. Before you toast the New Year, indulge in these eleven tax moves late in 2016.

  1. Harvest capital losses
    If you realized capital gains this year, consider selling securities that can generate a loss. Losses can offset capital gains plus up to $3,000 of ordinary income.
  2. Max out capital gains
    Instead of harvesting current losses, you may want to generate gains that can be absorbed by previous capital losses. Long-term capital gains are taxed at favorable rates.
  3. Prepay local property taxes
    If your property taxes are due on January 1, pay them early to increase your deduction for 2016. Remember to keep an eye on whether you’ll owe alternative minimum tax.
  4. Accelerate a mortgage payment
    Along with your property taxes, you might prepay January’s mortgage bill to claim a higher mortgage interest deduction this year.
  5. Examine medical expenses
    When you’re under age 65, you can only deduct medical expenses above 10% of your adjusted gross income. If you’ve cleared the threshold, schedule routine medical and dental visits before year-end.
  6. Charge charitable donations
    If you make donations that are posted this year, you can deduct the amounts on your 2016 return, even though you’ll pay the charges in 2017.
  7. Spring for next semester
    Generally, payments made in December for a college tuition bill due in January are eligible for a 2016 credit or deduction if you otherwise qualify.
  8. Show your support
    You can generally claim a dependency exemption for a young child if you provide more than half of the child’s annual support.
  9. Install energy-savers
    If you make energy-saving improvements at home, you may qualify for a credit equal to 10% of the cost. Limits and exceptions apply.
  10. Take required payouts
    If you’re age 70½ or older, you must take required minimum distributions from qualified plans and IRAs to avoid a 50% penalty.
  11. Give generous gifts
    You can give children, friends, family members, and others up to $14,000 each in 2016 ($28,000 for married couples) without owing gift tax.