Woodbury, NY (PRWEB) November 23, 2013
Gettry Marcus CPA, P.C., reveals 12 year-end tax planning steps that individuals should consider in 2013.
- If an individual becomes eligible to make health savings account (HSA) contributions in December of this year, he or she can make a full year's worth of deductible HSA contributions for 2013.
- Realize losses on stock while substantially preserving an investment position. There are several ways this can be done. For example, sell the original holding, and then buy back the same securities at least 31 days later.
- Postpone income until 2014 and accelerate deductions into 2013 to lower the 2013 tax bill. This strategy may enable an individual to claim larger deductions, credits, and other tax breaks for 2013 that are phased out over varying levels of adjusted gross income (AGI). These include child tax credits, higher education tax credits, the above-the-line deduction for higher-education expenses, and deductions for student loan interest. Postponing income also is desirable for those taxpayers who anticipate being in a lower tax bracket next year due to changed financial circumstances. Note, however, that in some cases, it may pay to actually accelerate income into 2013.
- It may be advantageous for an individual to try to arrange with his or her employer to defer a bonus that may be coming their way until 2014.
- Consider using a credit card to prepay expenses that can generate deductions for this year.
- If an individual expects to owe state and local income taxes when filing a return next year, he or she should consider asking the employer to increase withholding of state and local taxes (or pay estimated tax payments of state and local taxes) before year-end to pull the deduction of those taxes into 2013 if doing so won't create an alternative minimum tax (AMT) problem.
- Accelerate big ticket purchases into 2013 in order to assure a deduction for sales taxes on the purchases if the individual will elect to claim a state and local general sales tax deduction instead of a state and local income tax deduction. Unless Congress acts, this election won't be available after 2013.
- An individual may be able to save taxes this year and next by applying a bunching strategy to miscellaneous itemized deductions, medical expenses and other itemized deductions.
- Homeowners can make energy saving improvements to the residence, such as putting in extra insulation or installing energy saving windows, or an energy efficient heater or air conditioner. They may qualify for a tax credit if the assets are installed in their home before 2014.
- Unless Congress extends it, the up-to-$4,000 above-the-line deduction for qualified higher education expenses will not be available after 2013. Thus, consider prepaying eligible expenses if doing so will increase an individual's deduction for qualified higher education expenses. Generally, the deduction is allowed for qualified education expenses paid in 2013 in connection with enrollment at an institution of higher education during 2013 or for an academic period beginning in 2013 or in the first 3 months of 2014.
- An individual may want to pay contested taxes to be able to deduct them this year while continuing to contest them next year.
- An individual may want to settle an insurance or damage claim in order to maximize the casualty loss deduction this year.
Gettry Marcus CPA, P.C. is a Top 200 firm nationally with offices in Woodbury, Long Island and New York City. We provide accounting, tax, and consulting services to commercial businesses, high net worth individuals and various industries which include Real Estate and Health Care. We have one of the premier and most credentialed Business Valuation, Litigation and Forensic Accounting Groups in the New York Area. Our experience in diverse industries and a highly talented and experienced professional staff gives us the ability to share valuable insights into our clients’ businesses, to better understand their goals and problems and to help them attain the vision they have for their company.
Gettry Marcus is "Always Looking Deeper" to build value for our clients.
Media inquiries: Contact Fayellen Dietchweiler at 516-364-3390 ext. 225 or via email at fdietchweiler(at)gettrymarcus(dot)com