As I wrote in my blog post on 11/22, there are two early-proposals afloat for cutting individual taxes. Here is an interesting excerpt from Barrons discussing how one might act now to benefit the most from these expected tax cuts.
“Given the potential changes to income-tax rates, what should individuals be doing now?
We’re recommending the same things we recommended back in 1986 when the Tax Reform Act lowered individual rates. The smartest thing to do is accelerate deductions into the current year when they will be deductible at higher tax rates and defer income until future years when it will be taxed at lower rates. Specifically, you should think about accelerating charitable contributions and prepaying state and local taxes. Pay them in December rather than in January. If you have stock-market losses, you ought to take them in 2016. You want to accelerate those losses and you want to defer gains.
How would you approach long-term capital gains?
While long-term gains are preferentially taxed, you still want to defer them until next year because, under the House plan, they will be taxed at even lower rates.”
Note: This should not be considered as tax advice. Every situation is different. You should consult with a qualified tax advisor before taking any action.