Tag Archives: Clumping

Clumping Property Tax and Deductions Reminder – Standard Deduction Maximization Strategy

Over the Thanksgiving Holiday’s several family members were surprised to find out that there are still tax law changes – well clarifications, that are going on at this time…

It is possible that there will be changes/clarifications occurring right up and through this first “New” Tax season…

Now is reminder time for taxes — but given the above — we have more of a butter knife than a tax scalpel for our surgical tax techniques — No matter …. Let’s go!

Clumping Property Tax

A joint family will receive a $24k – yes … Twenty Four Thousand Dollar STANDARD deduction – add on to this that the new limited – state and local sales tax (SALT) deduction (read property tax) of $10k annually,  planning is needed to maximize deductions.

The easiest and most common way to POSSIBLY maximize deductions is to clump your property taxes as well as other elective expenses. As you can easily tell, clumping your SALT deductions will get you to $20k so we are still not there…

Mortgages interest up to $1million in loan value prior to 2018 and $750k after is still deductible.

Bad Deduction Planning

All of this fancy acceleration and delayed of tax deductible expenses is to avoid the following –

Every year coming up with just under the standard deduction! I.e. $23k of deductions annually is likely not as tax efficient as possible…

A better solution would look like this:

Clumping Taxes

Skip years = Standard/no itemization/simple tax return

According to this AARP report earlier in 2018 the approximate 30% of tax payers who formerly itemized will drop to about 10% –

Bottom Line do not feel bad if you do not itemize, BUT you may still be able to itemize every other year, under an appropriate standard deduction tax max strategy.

Reach out with questions before year’s end – We can help you calculate what the best strategy may be!

Have a Great “Standard Deduction Maximization” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

One of the few tax choices left … Clump or Pay those Property Taxes?

This is the time of year that most municipalities ask for their property tax payment… In many cases you have the option to pay in the current year (December 2016) or next year (January 2017).

To Clump or Not to Clumpirs

Big or Small Income Year

Before just paying those property taxes as you usually do, think for a moment if you have had an extremely good (high income) or low income year. If either of these fit your situation it may make sense to defer your property taxes and clump them into one year.

Standard Deduction

If your standard deduction is greater than your tax write offs, check to see if pushing two property tax payments into one year will get you over the standard deduction.

Heavy or Light Charitable Year

Just as a high or low income year, some years we may find that we have given more to charity than others. Step back a moment and see how your property tax payment will affect your total tax write offs. It may make sense to clump.

This is by no means a recommendation to clump or not as there are a lot of moving parts with this strategy. We are only asking you to think about your situation and if any may apply. See your tax professional before making a move!

Contact us if you have any questions!

Have a Great Friday and weekend… sorry for the heavy post on a Friday but the year is almost gone and we wanted to get our tax strategies to you!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

 

November 2014 Super Cool “Tax Saving” End of the Year Financial Planning Tip, Capital Market and Economic Review (Video)

Welcome to our monthly Economic, Capital Market, and Financial Planning tip of the month.

This months Financial Planning Tip of the month, like last months, may save you valuable tax dollars!

Once again a special thanks to all of  YOU … the best clients and friends as your experiences have again given us the subject matter for our Financial Planning Tip of the Month.

For those new to our writings, we touch on the most pertinent Financial “stuff” along with a video of my mug that has even more specialized details of the latest month as well as this post.

Ok…let’s go!

VIDEO

You Tube Direct Link   or   Vimeo Direct Link

 

Another special Tax saving Financial Planning Tip: consider clumping of those property taxes

Pull out your tax return from last year, and the prior if you have it.Uncle Sam $

If you are not itemizing (or just barely over the standard deduction) you MAY be a candidate for clumping your property taxes.

Now pull out your tax bill that you most likely just received. If multiplying it times two throws you well over your standard deduction, consider clumping two of our tax payments into one year i.e. Pay January and December of the same year and then skip the next year, especially if you are not itemizing or just barely over the standard itemized amount.

IRS Standard deductions for 2014:

  • *Married filing jointly or surviving spouse $12,400
  • *Head of household $9,100
  • *Unmarried $6,200
  • *Married filing separately $6,200

 

Confused? Give us a call, we will explain!

cO-aNCHOR Sirius sATELlITE RADIO SHOW

Early this month (Nov 4) I had the honor to be asked to co-chair a financial planning Sirius radio show, presented by Wharton Business School and a finance professor at the university.Sirius Logo

After the intro and background of myself and our firm, the phones immediately rang from across the United States with multiple single individuals, many of them women, matching much of our client base.

After a full hour of spontaneous questions and answers, the show was on to the next segment. What a fun experience and a super way to give back.

Have a Great dash to the end of the year!

John A. Kvale CFA, CFP

http://www.jkfinancialinc.com
http://www.street-cents.com
8222 Douglas Ave # 590
Dallas, TX 75225