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16 December 2016

Thought Leader: Robert Fishbein

Thought Leader: Robert FishbeinHow to smooth out year-end tax planning

Though the year is almost over, there are still new ways to smooth out the 2016 tax planning process.

For starters, says Robert Fishbein, a vice president and corporate counsel in Prudential’s Tax Department, taxpayers can plan for 2016 and 2017 together to reduce their overall tax liability by shifting income and deductions across the two years. One way is to pay January mortgage payments now to make the interest deductible this year. Another is to accelerate charitable deductions or medical expenses into 2016. Those over age 70½ can consider making charitable gifts using required minimum distribution funds, up to $100,000 a year.
“It’s usually better than an outright gift to charity because the deduction would probably not offset the income from the required minimum distributions due to limitations on deductions,” Fishbein says.

He also notes if taxpayers have unused capital losses from prior years they can sell investments at a gain to make those losses work. “You won’t be taxed on those gains, up to the amount of the losses,” he explains.   

Another tax strategy wrinkle? Converting a traditional IRA to a Roth IRA. Although the conversion would trigger a gain, says Fishbein, there are numerous benefits from holding Roth IRA assets over the longer term—from hedging against increased tax rates to growing without forced distributions. And distributions, he says, “won’t increase your taxable income for purposes of the 3.8 percent Medicare surcharge, calculating the taxable amount of your Social Security benefits or determining the Medicare Part B premium surcharge.” 

Interested in learning more about year-end tax planning strategies? Read Robert’s opinion piece. Want to speak to Robert? Contact Lisa Bennett.
Neither Prudential Financial, its affiliates, nor its financial professionals, renders tax or legal advice. Please consult with an attorney, accountant, and/or tax advisor for advice concerning your particular circumstances. 


Lisa M. Bennett
phone: 973-802-2894
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