Should I defer or accelerate income? If it looks like you’ll be in a higher tax bracket in 2014, ask if you should pull more income into this year. Conversely, if you will be in a lower tax bracket next year, ask if you should defer income until January. In addition, find out if you should accelerate deductions by paying any income or property taxes not due until 2014 this year.
Should I take any gains or losses this year? If you are currently in a low tax bracket and have made gains on your investments this year, you may want to consider selling some investments to realize lower tax rates on those gains.
Should I do a Roth conversion? If you have a traditional IRA, you may want to convert all or some of the assets to a Roth IRA, especially if your retirement is years away. While you will pay taxes on those assets now, your earnings will grow tax-free in a Roth IRA.
Should I make any changes to my FSA or HSA for 2014? If you have a flexible spending account or health savings account through your employer and anticipate bigger medical expenses in the new year, you may want to increase those funds to allow yourself to use pretax money for out-of-pocket medical costs.
Should I be making charitable contributions? If you made more money this year, you may want to think about reducing your taxable income with charitable contributions. Gifting appreciated securities will allow you to avoid the capital gains tax while still deducting the full amount of the donation.
Should I be making gifts to family? In 2013, you can give up to $14,000 (or $28,000 if you are married and your spouse participates) to as many individuals as you want. This allows you to assist family members while removing taxable assets from your estate. It’s important that if you are going to be giving gifts, you call us because we can set it up so those gifts are protected from bankruptcy, divorce or other creditors forever.
If you would like more information about tax-saving strategies, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.