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Year End Income Tax Saving Tips

There is still time to take some steps to increase your refund or cut down the amount you may have to pay when you file your 2013 state and federal income taxes. The intricacies of the Affordable Health Care Act (Obamacare) have introduced enough uncertainty over the effects of various adjustments in income and deductions so that, if possible, it would be advisable to run projected numbers and adjustments through up-to-date software to be sure the proposed adjustment does not trigger an unintended tax liability resulting from the Act's bizarre financing mechanisms. However, the following are worth considering:

1. Accelerate payment of 2013 real estate taxes. If a taxpayer owns real estate, they have already received their tax bill for 2013 with installments due by the end of January and July 2014. The effect of making payments before the end of 2013 may operate to bump up the itemized deductions and save significant dollars in an appropriate tax return.

2. Harvest capital losses. The stock market has been on a recently with the Dow reaching record levels. If you own mutual funds, you may have already been advised that a fund will recognize short-term gains, long-term gains or a combination of both. You may also have gains from the sale of livestock, business property or real estate. If you also have property which has declined in value, say that tech stock that you bought before the crash, it may be wise to sell that asset in 2013 so that you can offset gains with an appropriate loss.

3. Place a business asset into service before the end of the year. If you acquire a new piece of farm machinery, business vehicle, or other depreciable asset and actually use it in your business before the end of the year, you may be able to take advantage of accelerated depreciation and other options.

4. Charitable deductions. If you have a tax return in which you are going to itemize your deductions anyway, the end of the year might be the time to consider an increased contribution to your favorite charity. Note that you need to obtain a contemporaneously issued receipt showing the amount of the charitable deduction and discounting the value of any items received.

5. Educator expenses. The educator's credit for supplies purchases has been extended. If you or your spouse is a teacher, you may want to consider some necessary classroom supplies before the end of the year.

As indicated above, Obamacare has made a complex tax code even more tricky. Therefore, it may be a good return on your money to have someone with up-to-date software run projected numbers and alternate scenarios to evaluate the desired result. At Hoeper Law Offices we are always interested in assisting both existing and new clients to maximize their income tax situation and minimize their liabilities. Call 920-324-5050 today and let us help you.

Hoeper Law Offices - Waupun Probate Attorney
512 E. Main Street
Waupun, WI 53963
Phone: (920) 324-5050
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The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.

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