Tax Tips For Spokane & Stevens Counties

As the year draws to a close, it’s time to consider smart tax planning strategies that can help you save money and make a positive impact in your community. Here are some key moves to consider before the year ends, especially if you live in Deer Park, WA or the surrounding Spokane area.

1. Consider Donor-Advised Funds (DAFs)

If you’re planning to donate to a charity, a Donor-Advised Fund (DAF) can be a tax-efficient way to give. You can contribute to a DAF now, receive an immediate tax deduction, and decide later which charities to support. This is an excellent option if you’ve had a higher-than-usual income this year and want to offset it. Consider supporting local Deer Park non-profits, such as the Greenhouse Food Bank or Habitat for Humanity-Spokane, through your DAF.

2. Required Minimum Distributions (RMDs)

If you are 73 or older, don’t forget about your Required Minimum Distributions (RMDs) from traditional IRAs and 401(k)s. Failing to take the correct RMD can result in a 50% penalty on the amount you should have withdrawn. Speak with a financial advisor to ensure you’re on track.

3. Qualified Charitable Distributions (QCDs)

Did you know that if you’re 70? or older, you can donate up to $100,000 directly from your IRA to a charity without it being considered taxable income? This is known as a Qualified Charitable Distribution (QCD). It’s a great way to support causes you care about while reducing your taxable income. Local organizations like Deer Park High School’s sports programs or Second Harvest Inland Northwest could greatly benefit from your generosity.

4. Roth IRA Conversions

A Roth conversion can be a savvy move if you expect to be in a higher tax bracket in retirement or want to leave a tax-free inheritance to your heirs. Converting a portion of your traditional IRA to a Roth IRA now allows you to pay taxes at today’s rate rather than later when rates might be higher. Careful planning can ensure you don’t push yourself into a higher tax bracket this year.

5. Capital Gain Harvesting

Depending on your income, you might qualify for the 0% tax rate on long-term capital gains. If your taxable income falls below certain thresholds ($89,250 for married couples filing jointly or $44,625 for singles in 2024), you could potentially sell appreciated investments at no tax cost. This can be a great way to rebalance your portfolio or generate extra income.

6. Senior Discounts on Property Taxes

If you’re a senior living in Spokane or Stevens County, you might be eligible for a property tax reduction if your income is below a certain level. This program can help lower your annual expenses, making it easier to stay in your home as you age. Each county has specific income thresholds and application processes, so be sure to check the details.

For more information:

• Spokane County residents can call the Assessor’s Office at (509) 477-3698. If you are 62 or older, own your home, and have a total household income of less than $50,000, you may be eligible for a reduction in your property taxes. An application is available on the Assessor Exemption Application Forms website , or you can call 477-3698 to have one mailed to you.
• Stevens County residents can reach out to the Assessor’s Office at (509) 684-6161 or visit https://www.stevenscountywa.gov/assessor for information on income limits and qualifications.

Be sure to act soon to take advantage of this valuable benefit!

7. Retirement Plan Contributions for Business Owners

If you’re a business owner in Deer Park or the surrounding area, setting up or contributing to a business retirement plan before the end of the year can help you and your employees save on taxes while preparing for your future. Options like SEP IRAs, SIMPLE IRAs, and 401(k) plans allow you to make contributions that are tax-deductible for your business.

How much could you save? Let’s say you contribute $10,000 to a SEP IRA or 401(k) plan. If you’re in the 22% tax bracket, that could save you $2,200 in taxes. Higher contributions mean even greater savings, with potential limits up to $66,000 for a SEP IRA and $23,000 (or more, with catch-up contributions) for a 401(k).

Not only are you reducing your taxable income, but you’re also building a solid retirement fund. Plus, offering a retirement plan can be a great incentive to attract and retain employees. If you haven’t set up a plan yet, consider doing so before the end of the year, or make the most of existing plans by maximizing contributions.

Consult a financial advisor to understand which plan is right for your business and how you can maximize your tax savings while planning for retirement.

Start Planning Now

With the end of the year fast approaching, now is the time to evaluate your tax situation. Effective planning could mean more money in your pocket, a stronger financial future, and a greater impact on the Deer Park community. Consult a financial advisor who understands your needs and can help you make the most of these opportunities.

For tailored advice, consider reaching out to a local Deer Park, WA financial advisor. Read reviews to see which one sounds like the right fit for you. They can provide personalized strategies to help you save on taxes and work towards your financial goals.

When you have questions or just want to chat about your progress Schedule A Complimentary Discovery Call or reach out to Caleb Stapp on LinkedIn or at 509.241.8306.

Originally published at https://deepcreekfinancialplanning.com/tax-tips-for-deer-park-residents and used with permission.

LPL Financial representatives offer access to Trust Services through The Private Trust Company N.A. an affiliate of LPL Financial. Securities and advisory services are offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. Deep Creek Financial Planning?is not?registered as a broker-dealer or investment advisor. This information is not intended to be a substitute for individualized tax advice. Please consult your tax advisor regarding your specific situation. Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss. IRA conversions prompts disclosure: Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.