Your Friends that Count

“Your Friends that Count” is an informative, consumer-focused accounting blog by the Certified Public Accounting team at John Kasperek Co., Inc.

Start Your Tax Planning before the Year End

planAccording to the Internal Revenue Service (IRS), about 75% of taxpayers take the standard deduction but could be missing out on valuable tax deductions if they can itemize. If you are like the thousands of Americans who will owe taxes or will have difficulty finalizing your returns next year, understanding some basic deductions accepted by the IRS in advance could have a significant impact on your bottom line. To maximize your returns, consider the advantages of year-end tax planning to set up your best possible tax scenario in the New Year.

The tax laws are pretty straightforward, but beware of the alternative minimum tax and always consult a tax professional to best determine how the law affects your unique situation (John Kasperek Co., Inc. is offering a $25 credit for individuals and $50 for businesses who begin planning before the year-end). Here are some tips to consider as you explore your year-end options:

Accelerate Your Deductions
Before the year’s over, make those charitable donations or expense purchases that will be considered deductible. You control the timing, so contact your favorite charity to make donations, purchase tickets or donate in-kind contributions in advance. Other expenses you can accelerate include an estimated state income tax bill due January 15, a property tax bill due early next year, or a doctor’s bill. Remember, you must have a receipt to back up any contribution, regardless of the amount.

Deferred Income
Income is taxed in the year it is received, but you may be able to defer a year-end bonus into next year if your employer has done so before. If you are self-employed, delaying billings until late December can ensure that you won't receive payment until the next year. Whether you are employed or self-employed, you can also defer income by taking capital gains in 2018 instead of in 2017 if you think you will be in the same or a lower tax bracket next year. (You don't want to be hit with a bigger tax bill next year if additional income could push you into a higher tax bracket.)

Sell Investments
Selling investments such as stocks and mutual funds to realize losses can offset any taxable gains you have realized during the year. Losses offset gains dollar for dollar, and if your losses are more than your gains, you can use up to $3,000 of excess loss to wipe out other income, and if you have more than $3,000 in excess loss, it can be carried over to the next year.

Contribute to Retirement Accounts
Tax-deferred retirement accounts can grow to a substantial sum because they compound over time free of taxes. You may want to increase your 401(k) contributions so that you are putting in the maximum amount of money allowed ($18,000 for 2017, $24,000 if you are age 50 or over). At a minimum, try to contribute the amount that will be matched by employer contributions.

Understanding Your Situation
If your qualifying expenses exceed the standard deduction, which in 2017 is $6,350 if you are single, or $12,700 if you’re married filing jointly, then you likely should maximize your deductions and itemize. However, sometimes accelerating deductions can cost you money if you're already in the alternative minimum tax (AMT) or if you trigger it. The AMT is figured separately from your regular tax liability and with different rules—you must pay whichever tax bill is higher. This is a year-end issue because certain expenses that are deductible under the regular rules—and therefore candidates for accelerated payments—are not deductible under the AMT. State and local income taxes and property taxes, for example, are not deductible under the AMT. So, if you expect to be subject to the AMT in 2017, consider paying the installments when they are due in January 2018 as opposed to paying them in December 2017.

Continue reading
  3999 Hits
  0 Comments
3999 Hits
0 Comments
  • Our Clients

    Our Clients

    Our client list at John Kasperek Co., Inc. features a wide range of significant audit work including local governments, townships, school districts, municipal pension funds, not-for-profit organizations and common interest real estate associations. In addition, we also serve a variety of small business S-Corporations, Partnerships and individuals.

    We are happy to provide contact information for referrals upon request. Here is a sample of our client list.

  • Our Staff

    Our Staff

    Our team at John Kasperek Co., Inc., Certified Public Accountants is dedicated to providing quality, personalized financial guidance to local government, not-for-profit organizations, businesses, corporations and individuals.

    Managing Partner John Kasperek, Jr. has developed our team of professionals with an excellent working knowledge of the accounting principles and current standards to provide the highest level of excellence to our clients. Well known throughout Chicagoland area for his diverse expertise in all aspects of accounting, John has built a thriving company that serves the critical needs of the south suburban and northwest Indiana region.

    Please feel free to reach out to John or the rest of our team at John Kasperek Co., Inc. any time for answers to your questions. Email This email address is being protected from spambots. You need JavaScript enabled to view it. or call (708) 862-2262.

  • Our News

    Our News

    In order to better serve our clients, partners, friends and colleagues, John Kasperek Co., Inc. will issue a new monthly digital newsletter with relevant financial and accounting information, changes to auditing standards and procedures, news and announcements from our firm. Please email This email address is being protected from spambots. You need JavaScript enabled to view it. if you would like to be added to our digital newsletter distribution list.

    Additionally, we recently created an informative, consumer-focused accounting blog titled Your Friends that Count that is posted online at www.kasperekcpa.com/friends and is distributed through Facebook and LinkedIn.

    We will post press releases, announcements and stories from our firm to our Newsroom page.
  • Our Offices

    Our Offices

    John Kasperek Co., Inc.’s Corporate Office in Mokena is conveniently accessible from I-80 and Lagrange Road. JKC’s Calumet City Office is located near Torrence Avenue, I-80 and I-94. Our primary service area reaches throughout the Chicago Southland and Northwest Indiana region.

    We travel to our clients to provide services when and where they are needed.

    9980 190th Street, Unit A
    Mokena, IL 60448
    1471 Ring Road
    Calumet City, IL 60409
    (708) 862-2262
    This email address is being protected from spambots. You need JavaScript enabled to view it.