---
title: 3 Tips for Reducing Your Taxable Income in 2016
description: Here are 3 tips to consider heading into the end of the year, all of which provide a win-win by reducing taxable income and providing a meaningful benefit.
image: http://www.wrapmanager.com/hubfs/blog-files/3%20Ways%20to%20Reduce%20Taxable%20Income.png
---

[![Assembly Wealth](https://www.letsassemble.com/hs-fs/hubfs/Assembly/logos/Assembly-Wealth-Logo-Orange-500px.png?width=300&height=70&name=Assembly-Wealth-Logo-Orange-500px.png "Assembly Wealth")](https://www.letsassemble.com/)

The Money Manager People TM

[800-541-7774](tel:+18005417774)

[![RESEARCH MONEY MANAGERS](https://no-cache.hubspot.com/cta/default/10700/7ecbcb66-3fbb-41e3-b219-c24fb3c769c5.png)](https://cta-redirect.hubspot.com/cta/redirect/10700/7ecbcb66-3fbb-41e3-b219-c24fb3c769c5)

[![Client Center](https://no-cache.hubspot.com/cta/default/10700/8691dcb4-caa3-42c2-a810-77b59f461fd2.png)](https://cta-redirect.hubspot.com/cta/redirect/10700/8691dcb4-caa3-42c2-a810-77b59f461fd2)

[Home](https://www.letsassemble.com/)

WrapManager's Wealth Management Blog

When life changes, we can help you thoughtfully respond.

[< Back to read another post](https://www.letsassemble.com/wealth-management-blog)

# 3 Tips for Reducing Your Taxable Income in 2016

Posted by [ Gabriel Burczyk | Founder & CEO](https://www.letsassemble.com/wealth-management-blog/author/gabriel-burczyk)  
 October 26, 2016

- [Tweet](https://twitter.com/share)

![How to Reduce Taxable Income.png](http://www.wrapmanager.com/hubfs/blog-files/3%20Ways%20to%20Reduce%20Taxable%20Income.png "How to Reduce Taxable Income.png")

With the end of the year fast approaching and holiday season just a few weeks away, time is running out for investors to “make moves” that could benefit the filing of 2016 taxes next April.

Here are three tips to consider as we head into the end of the year.

All of these provide a win-win for investors of reducing your taxable income *and *providing a meaningful benefit to your household:

 

 

1. **Maxing Out Your Retirement Plan! – **for 2016, the maximum contribution level for a 401(k), 403(b), and 457(b) is $18,000, but that amount jumps to $24,000 if you are age 50 or older. For those retirees who think that your tax rate will be higher once you stop working than it is now, you may want to consider a Roth retirement strategy (if your workplace offers it). A Roth would not offer you the same tax deduction that a traditional IRA or 401(k) contribution would, but any earnings and dividends grow tax free, and withdrawals are also tax free if taken in retirement.1
2. **Not Covered by a Workplace Retirement Plan? You May Have Options – **if you or your spouse are not covered by a workplace plan, you can most likely contribute to a Traditional IRA and take your deduction that way. The maximum contribution is $5,500 per person ($6,500 if you are age 50 or older) or 100% of employment compensation, whichever is less. If you are not covered by a workplace plan but your spouse is, then you can still contribute to a Traditional IRA as long as your annual modified adjusted gross income is less than $184,000.1 
3. **Making Charitable Contributions Before Year-End – **the IRS states that you can deduct contributions made in cash or property (like shares of stock from a brokerage account!) before the end of the tax year. Deductions are allows as long as you are giving to a “qualified organizations” and assuming you itemize your deductions. According to the IRS, you may deduct up to 50 percent of your adjusted gross income, but 20 percent and 30 percent limitations apply in some cases. If you want to make a charitable donation but are unsure if it qualifies for deduction, simply visit the IRS website to check (you can also contact a Wealth Manager here at WrapManager and we will help you find out: [Qualified Charitable Organizations](https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contribution-deductions).)2

Another tactic to consider for the end of the year is [gifting](http://www.wrapmanager.com/wealth-management-blog/gifting-rules-associated-with-529-plans). Making gifts to family members or loved ones is generally not tax deductible, but you are allowed to reduce your estate by the size of your gifts, which could help with estate planning. The annual exclusion applies to gifts to each recipient, and the max amount for 2016 is $14,000 per person per donor. 3

### **Don’t Wait Until the Last Second! Have a Wealth Manager Help You Today**

If you think you may have the opportunity to take advantage of some of the above tax benefits, but aren’t exactly sure how to get started, please do not hesitate to give one of our Wealth Managers a call at 1-800-541-7774. We can walk you through each tactic and let you know if it applies to your situation. We can also help you make sure you are on track to make all of your Required Minimum Distributions for the year, if that applies to you. If you would rather communicate over email to get started, just email us at [wealth@wrapmanager.com](mailto:wealth@wrapmanager.com).

[![Find Money Managers. Invest with conficence. ](https://no-cache.hubspot.com/cta/default/10700/be5d16cf-b0d9-4a4e-b9be-b3b6dca84f8f.png)](https://cta-redirect.hubspot.com/cta/redirect/10700/be5d16cf-b0d9-4a4e-b9be-b3b6dca84f8f)

 

**Sources:**

1. [Fidelity: ](https://www.fidelity.com/viewpoints/personal-finance/tax-smart-savings-tips)[Eight Tax Savings Tips](https://www.fidelity.com/viewpoints/personal-finance/tax-smart-savings-tips)

2. [IRS: Charitable Contributions Deductions](https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contribution-deductions)

3. [IRS: FAQ on Gift Taxes](https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes)

*The information presented by WrapManager, Inc. is general information only and does not represent tax or legal advice either expressed or implied. You are encouraged to seek professional tax advice for income tax questions and assistance. WrapManager, Inc. does not advise on any income tax requirements or issues.*

[Tax Planning](https://www.letsassemble.com/wealth-management-blog/topic/tax-planning)

[![Retirement-planning-strategy-ebook-CTA-large](https://no-cache.hubspot.com/cta/default/10700/c5ce76f4-6dc3-447f-9bc5-526eed4b84a4.png)](https://cta-redirect.hubspot.com/cta/redirect/10700/c5ce76f4-6dc3-447f-9bc5-526eed4b84a4)

### Subscribe to Updates

[Subscribe to RSS Feed](https://www.letsassemble.com/wealth-management-blog/rss.xml)

[![New Call-to-action](https://no-cache.hubspot.com/cta/default/10700/ffe2a394-957b-481b-9f80-4ef176bd6aaf.png)](https://cta-redirect.hubspot.com/cta/redirect/10700/ffe2a394-957b-481b-9f80-4ef176bd6aaf)

### Most Recently Published

### Blog Authors

[![Gabriel Burczyk](http://www.wrapmanager.com/hs-fs/hub/10700/file-2347381761-jpg/Athors_Avatars/Gabe-avatar.jpg "Gabriel Burczyk")](http://www.wrapmanager.com/wealth-management-blog/author/gabriel-burczyk)

[**Gabriel Burczyk,**](http://www.wrapmanager.com/wealth-management-blog/author/gabriel-burczyk)  
[Founder & CEO](http://www.wrapmanager.com/wealth-management-blog/author/gabriel-burczyk)

[![Valerie De Vol](http://www.wrapmanager.com/hs-fs/hub/10700/file-2457588837-jpg/Athors_Avatars/Valerie-De-Vol-avatar.jpg "Valerie De Vol")](http://www.wrapmanager.com/wealth-management-blog/author/valerie-de-vol)

[**Valerie De Vol, **IACCP®  
Chief Operating Officer](http://www.wrapmanager.com/wealth-management-blog/author/valerie-de-vol)

[![Seton-avatar.jpg](http://www.wrapmanager.com/hs-fs/hub/10700/file-2344519198-jpg/Athors_Avatars/Seton-avatar.jpg "Seton-avatar.jpg")](http://www.wrapmanager.com/wealth-management-blog/author/seton-mcandrews)

[**Seton McAndrews, **CFP®  
](http://www.wrapmanager.com/wealth-management-blog/author/seton-mcandrews)[Vice President - Investments](http://www.wrapmanager.com/wealth-management-blog/author/seton-mcandrews)

[![Doug Hutchinson](http://www.wrapmanager.com/hs-fs/hub/10700/file-2347381751-jpg/Athors_Avatars/Doug-avatar.jpg "Doug Hutchinson")](http://www.wrapmanager.com/wealth-management-blog/author/doug-hutchinson)

**[Doug Hutchinson,](http://www.wrapmanager.com/wealth-management-blog/author/doug-hutchinson) **[CFA®  
](http://www.wrapmanager.com/wealth-management-blog/author/doug-hutchinson)[Director of Research and Trading](http://www.wrapmanager.com/wealth-management-blog/author/doug-hutchinson)

![Katie - square.png](https://www.wrapmanager.com/hubfs/Katie%20-%20square.png "Katie - square.png")

[**Katie O'Connor  
**Director of Client Services](https://www.wrapmanager.com/wealth-management-advisors/katie-oconnor)

**Important Disclosure Concerning WrapManager Blogs**

Blogs found at this site have been created or supported by WrapManager. The information provided in a blog post prepared by WrapManager or an associated person of WrapManager is generally limited to financial and economic issues, but may include a discussion of general interest items. The views and opinions expressed on this blog are purely the blog authors, and not necessarily those of WrapManager, Inc. Certain blog posts include information pertaining to WrapManager’s investment advisory services and the products and services of unaffiliated money managers. Such information is provided for information purposes only. Accordingly, information provided in a blog should not be construed by any consumer and/or prospective client as a solicitation to effect or attempt to effect transactions in securities or the rendering of personalized investment advice. Any subsequent, direct communication by WrapManager with a prospective client shall be conducted by a representative of WrapManager. Moreover, no client or prospective client should assume content contained on the website serves as a substitute for personalized advice from WrapManager. Different types of investments involve varying degrees of risk, and there can be no assurance that any investment, portfolio or money manager referred to within the blog will be suitable for your individual situation and risk tolerance or will be profitable. WrapManager recommends that you retain a financial professional to provide you with specific guidance regarding your financial situation before investing. Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested.

Although the information included in the WrapManager, Inc. website and blog has been obtained from sources WrapManager believes to be reliable, we do not guarantee its accuracy and information may be subject to change without notice. This website should not be regarded as a complete analysis of the subjects discussed. Information on this site should not be relied upon as a substitute for legal, tax or accounting advice by a professional in your local jurisdiction.

Comments made by third parties are subject to moderation by WrapManager and may not appear on this blog until they have been deemed appropriate for posting. Also, due to the volume of comments received, not all comments will be posted.

WrapManager does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party website linked to WrapManager's web site or incorporated within a blog post. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

 

 

```json
{
  "@context" : "https://schema.org",
  "@type" : "BlogPosting",
  "author" : {
    "@type" : "Person",
    "name" : "Gabriel Burczyk",
    "url" : "https://www.letsassemble.com/wealth-management-blog/author/gabriel-burczyk"
  },
  "datePublished" : "2016-10-26T15:05:00.000Z",
  "headline" : "3 Tips for Reducing Your Taxable Income in 2016",
  "image" : [ "http://www.wrapmanager.com/hubfs/blog-files/3%20Ways%20to%20Reduce%20Taxable%20Income.png" ],
  "mainEntityOfPage" : {
    "@id" : "https://www.letsassemble.com/wealth-management-blog/3-tips-for-reducing-your-taxable-income-in-2016",
    "@type" : "WebPage"
  },
  "publisher" : {
    "@type" : "Organization",
    "logo" : {
      "@type" : "ImageObject",
      "url" : "https://www.letsassemble.com/hubfs/Assembly/logos/Assembly-Wealth-Logo-Orange-500px.png"
    },
    "name" : "Assembly"
  }
}
```