December’s here, but you can still encourage your clients to act strategically about their tax planning. The key, of course, is to get them to make moves that help minimize their liability.

Although the advantages of the new tax laws come with some complexity, your clients can reap lots of opportunities without getting bogged down in the details.

Here are 10 tips that can help save them money:

1. Maximize employee compensation and benefits. 

If your client offers retirement plans or HSA or FSA accounts to their employees, have them review their contributions, and maximize them if possible.

If your client doesn’t have plans, it may not be too late to get them established. Paying out bonuses and commissions or making needed adjustments to their withholdings may also be advisable.

2. Optimize gains & losses.

If your client has yet to start harvesting their capital gains or losses now, encourage them to do so.

Get them to use methods like installment sales or like-kind-exchanges when disposing of their assets and show them how they can manage the impact of the Net Investment Tax, or the 14-day rental limit on their vacation home.

3. Preserve the deductibility of charitable contributions while using the standard deduction.

Clients over 70½ with an IRA who claim the standard deduction can still give to charity and receive a benefit.

Through the Qualified Charitable Contribution, a client who gifts a Required Minimum Distribution (RMD) directly to charity doesn’t need to report it as income. Although they don’t get a charitable deduction, they are able to reduce their taxable income.

4. Defer business income in advantageous ways.

On the accrual side, make sure your client has updated their accounts receivables and customer deposits. On a cash basis, you might suggest that they defer some invoicing or customer payment requests until after the end of the year.

Besides reporting losses, your client should also use any credit-carryovers that are set to expire by December 31st. Finally, have them consider treating any business ventures that they run with their spouse as disregarded entities.

5. Accelerate business expenses towards tax-time advantage.

Suggest that your clients prepay for expenses where they can and purchase assets that have advantageous depreciation rules by the end of December.

They should also consider increasing their basis in partnerships or S-corporations in order to deduct available losses, including business vehicle leases.

6. Optimize the new 20% deduction for qualified business income.

The newly passed 2018 Tax Cuts and Jobs Act means new deductions for business owners. Clients should consider their net profit in relation to their payroll in order to maximize credit.

Also, get your clients to consider separating out parts of their business in a way that maximizes deductions. They can also avoid the deduction limits by changing their self-employed status to a partnership, S-corporation or C-corporation and deferring yearly income if feasible.

7. Manage itemized deductions and the standard deduction.

If your client’s annual itemized deductions are close to the standard deduction amount, you should suggest that they “bunch” their actual deductions into a single tax year in order to maximize deductions.

You can present the strategy in context of using actual deductions and the standard deduction in alternating years.

8. Take advantage of adjustments and credits.

For example, your client might prepay for childcare to meet the maximum thresholds or consider pulling the trigger on purchasing qualifying electric vehicles or solar equipment.

9. Leverage excess cash flow into tax opportunities.

Clients can take advantage of the annual gift tax exclusion, which allows them and their spouse to gift up to $15,000 to another person tax-free every year. They can also shift taxable assets between family members directly, or through the use of a living trust.

10. Make sure to factor in life events.

Inheritance, marriage, divorce and higher education enrollment, along with retirement, can affect your client’s tax situation in lots of different ways.

Tax preparation as part of a holistic financial plan can fold in the impact of these moments in their life.

Getting your clients to think strategically about their year-end tax planning has two major advantages: It lets you help them save money, and it deepens your client-advisor relationship.


Michelle Siebert, CPA, CFP, MSM, is the Tax Manager for the Denver office of Mercer Advisors, an RIA with about $15 billion in assets.