CBS Mornings: End of Year Money Tips

I joined CBS Mornings to discuss end of year financial planning tips and moves Americans can make now to save on taxes next year.

15 Year End Money Tips for 2015

The ball dropping in Times Square, the bungled singing of Auld Lang Syne and yes, year-end money tips…let’s get going! 1.  Sell winners in taxable accounts. If you expect your income to be higher next year, realize capital gains today at the lower rate. Your taxable income includes the gain, so factor that in when you make your decision.

2. Sell losers in taxable accounts. Losses offset gains that you have taken previously in the year; if you have more losses than gains, you can deduct up to $3,000 of losses against ordinary income. Be sure to avoid the "Wash Sale" rule, which precludes you from deducting a loss if you buy a "substantially identical" investment within 30 days.

3. Bunch itemized deductions. Many expenses can be deducted only if they exceed a certain percentage of your adjusted gross income (AGI). So try to bunch legal advice and tax planning, travel and vehicle costs into one year, so you exceed these the 2 percent floor.

4. Give appreciated stock or fund shares to charity. If you itemize deductions, you'll write off the current market value (not just what you paid for them) and escape taxes on the accumulated gains.

5.Use your gift tax exclusion. You can give up to $14,000 to as many people as you wish in 2015, free of gift or estate tax. If you combine gifts with a spouse, you can give up to $28,000 per beneficiary, per year.

6. Pay someone's education or medical bills.You can make unlimited payments directly to medical providers or educational institutions on behalf of others without incurring a taxable gift or dipping into your lifetime gift-tax exemption.

7. Fully fund your college savings 529 plan. Money saved in these programs grows tax-free and withdrawals used to pay for college sidestep taxes, too. You can invest up to $14,000 in 2015 without incurring a federal gift tax and many states offer state tax deductions for the contributions.

8.Fully fund employer-sponsored retirement plan contributions. The deadline for funding 401 (k), 403 (b) or 457 plans is December 31. This year, the limit is $18,000, plus an additional $6,000, if you are over 50.

9. Consider converting Traditional IRA into a Roth IRA. A conversion requires that you pay the tax due on your retirement assets now instead of in the future. Whether or not a conversion makes sense for you depends on a number of factors, the most important of which is whether or not you can pay the tax due with non-retirement funds.

10. Take Required Minimum Distributions. Generally, once you turn 70 ½, you must begin withdrawing a specific amount of money from your retirement assets (there are some exceptions). The penalty for not taking your RMD is steep -- 50 percent on the shortfall!

11. Consider a Qualified Charitable Distribution (QCD). One way to sidestep the taxation on your RMD is to make a Qualified Charitable Distribution, which allows you to gift up to $100,000 directly from your IRA to a charity without having to include the distribution in your taxable income. However, you swap having to claim the income for making a charitable deduction. As of this writing, lawmakers have not yet extended the QCD.

12. Estimate your 2016 Income. If you’re self-employed, and your tax bracket could rise next year, delay making tax-deductible business purchases until January, when the write-offs will become more valuable

13. Open a small business retirement account. If you open a qualified retirement account by December 31, you have until the day you file your taxes next year, including extensions, to make this year's contribution.

14. Adjust 2016 withholding. Stop the insanity of the interest free loans to Uncle Sam!

15 Start a filing system. Make this the year that you keep all your deductions/receipts organized and easy to find when April 15^th rolls around!