For better or worse, 2022 is coming to an end. Halloween has come and gone, and we’re now seeing Christmas decorations on display at Walmart and other major retailers. Always a sign that tax season is fast approaching.

As the big box stores ramp up for the fall and winter holidays, our focus is on projecting what our clients will be required to pay in federal, state, and local income taxes — and, more important, helping them minimize their tax liability.

The good news is that making year-end tax projections for 2022 will probably be less complicated than in recent years. The Inflation Reduction Act of 2022, which was signed into law in August this year, was a slender version of the tax changes that were initially proposed, and with midterm elections just around the corner, members of Congress aren’t likely to stir the pot by introducing any new tax legislation.

While we think it’s unlikely that individual income tax rates are going to increase soon, if any tax legislation does occur in 2023, we believe the changes are likely to be forward-looking. That being said, when it comes to Congress, we can’t predict anything with certainty.

What we can do is provide individual filers with tax-savings guidance you can count on and start to put into action right now. As you prepare for your 2022 Year-End Tax Planning Meeting (between now and Dec. 16 for SWC clients), take the following steps to start thinking about ways to reduce your tax liability. In next week’s post, we’ll cover additional tax-savings tips for business owners and entrepreneurs.

Step 1: Look for ways to defer taxable income.

Deferring taxable income (which includes accelerating deductions) is usually a good idea, especially in an inflationary environment. It allows you to hold onto your money longer and pay your taxes with devalued dollars later. If we were expecting federal income tax rates to increase soon, we might not be so quick to recommend deferring taxable income, but we’re not Continue reading… Continue reading… Continue reading…