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As the year comes to an end, this would be the best time to plan for your annual tax bill. Many wait to complete their tax planning in April, right before they foot the bill but by then it is too late. We all know this is not the best planning strategy, but then again neither is waiting for tax reform.

 

As October 15 (the last day to file 2013 personal income tax returns) has come and gone, it's a good time to make final adjustments and plans for 2014 taxes before December 31 arrives. Tax planning is a process which enables the most effective use of current laws, considering potential future legislation, and life changes.

 

Some of the life changes which effect taxes include: 

  • Getting married or divorced
  • Having a child or having an adult child move out on their own
  • Going to school or having a child go to college
  • Taking care of an aging parent or a sick child
  • Buying or selling a home
  • New job or business
  • Selling or purchasing a business
  • Retiring 

Although legislative changes are much less predictable, there are certain strategies we can still prepare for. Some planning strategies might include:

  • Bonus payments or deferrals depending on your brackets
  • Accelerating or deferring expenses such as property taxes or interest payments
  • Maximizing losses to offset gains or vice versa
  • Gifts of income producing assets to others in lower brackets
  • Passive activity income and passive losses reviewed for possible netting opportunities
  • Retirement plan contributions
  • Fixed asset expenditures
  • Estate planning 
Meeting with a trusted advisor can help you get your tax planning in order. Please contact your local UHY LLP professional for more information.