Year-end tax planning for 2022

Bunching charitable donations and medical expenses into one year instead of spreading them over two years is a good strategy if it enables you to exceed the higher standard deduction. 

Medical expenses and donations can be prepaid this year using a credit card. However, you can’t deduct payments this year if you receive medical care in a future year.

Property can be donated to a charity for a deduction without spending any additional money. For most properties, the deduction is the fair market value of the property donated.

Donating appreciated property like stock may provide additional tax savings because you would avoid paying capital gains.

You can't claim a deduction for any donation unless you keep a record of the contribution. Generally, a canceled check or receipt with the name of the charity, the date of your donation, along with the amount of the donation should provide the necessary documentation. 

A charitable deduction of $5,000 or more for a single asset or for multiple similar items of personal or real property may require a qualified appraisal.  

If your employer has a 401(k), contributing the maximum amount will reduce your taxable income.

Pay 2023 tuition in 2022 to take full advantage of the education credit. The American Opportunity Tax Credit is a tax credit for up to $2,500 per student. This helps to cover the cost of tuition, course materials, and fees paid during the taxable year. 

Pay your estimated state tax installment before the year ends instead of at the January due date. 

Pay your entire property tax bill by year-end, including installments due in 2023. 

Set up a health savings account (HSA). You can deduct contributions to an HSA to reduce your taxes. Earnings are tax-deferred until withdrawn, and withdrawals are tax-free when used to pay medical bills. 

Tax-loss harvesting, which offsets capital gains with losses, may be an excellent strategy if you have large losses this year or an unusually high income.  

Suppose you are retiring and expect a lower income next year, or you expect to have significant medical bills. In that case, you should consider deferring income and expenses to the following year.

Accelerating income into 2022 is a good idea if you believe you will likely be in a higher tax bracket next year. This is even more important if your earnings are close to threshold amounts. If you exceed the threshold, you will be liable for the Additional Medicare Tax or Net Investment Income Tax ($200,000 for single filers and $250,000 for married filing jointly) next year. 

Using these strategies before the end of the year could enable you to reduce your taxes.

David Zubler is a tax accountant and Enrolled Agent in East Tennessee, providing tax strategies and representing clients before the IRS and has over 25 years of tax experience. He is the author of six tax books and has shared tax advice on national TV. He is the founder and president of Your Tax Care. The company provides business and tax education, including David’s one-minute tax tip radio recordings at David can be reached at (865) 363-3019 or contacted by email at