Woodbury, NY (PRWEB) December 07, 2013
Gettry Marcus CPA, P.C., shares ways to accelerate or defer income/deductions as part of a year-end tax strategy.
The arrival of the end of 2013 presents special opportunities for most taxpayers to take steps in lowering their tax liability. The tax law imposes tax liability based upon a "tax year." For most individuals and small business, their tax year is the same as the calendar year. As the end of 2013 gets closer, most taxpayers have a more accurate picture of what their tax liability will be in 2013 than at any other time during the current year. However, if taxpayers don't like what they see, they have until year end to make improvements before their tax liability for 2013 is permanently set in stone.
A good part of year-end tax planning involves techniques to accelerate or postpone income or deductions, as the tax situation dictates. Efforts are generally focused on keeping projected tax liability for 2013 slightly lower than that anticipated for 2014, not overweighing projected tax liability for any one year. Having spikes in taxable income in any one tax year puts a taxpayer in a higher average tax bracket than they would be in if they had evened out the amount of taxable income between the current and subsequent year.
Right to income versus cash receipt - generally, a cash-basis taxpayer (which includes most individuals) recognizes income when it is received and takes deductions when expenses are paid. There is a subtle but important difference between the two:
For more year-end tax strategy tips, including compensation arrangements, visit the Gettry Marcus monthly tax update page.
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
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.
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Media inquiries: Contact Fayellen Dietchweiler at 516-364-3390 ext. 225 or via email at fdietchweiler(at)gettrymarcus(dot)com.