While the Tax Cuts and Jobs Act 2018 (TCJA) drastically changed several tax provisions, many year-end planning tactics remain. Managing taxable income is important not only for the new QBI deduction, but also for the additional Medicare tax and Net Investment income tax. Lowering your taxable income may also enable you to claim credits and other tax breaks that are phased out over varying levels of AGI.

Some ways to manage taxable income include:

• Harvesting capital losses to offset capital gains in your portfolio
• Deferring a bonus or other compensation until 2019
• If you are at least 70 ½ years, contributing to charities directly from your IRAs without having the amount of the contribution included in gross income
• Disposing of a passive activity in 2018, if doing so will allow you to deduct suspended passive activity losses
• Shifting income-producing assets to a child or other taxpayer to take advantage of lower brackets. For trusts, consider making distribution to beneficiaries in lower tax brackets.

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