Year-end tax planning is especially difficult this year due
to the many uncertainties over tax laws in 2013. In most years, accelerating
income would not be top strategy based on the time value of money.
However, if you’re concerned that tax rates will be going up for 2013 due to
expiring Bush tax cuts and the new Medicare tax, then we have a few suggestions
that may be of use before 2013, and could help to reduce
the overall burden of taxes.
Accelerate income into 2012:
- C corporations pay a special dividend
- Sell appreciated assets
- Complete Roth IRA conversions
- Accelerate billings and collections
Postpone deductions until 2013:
- Postpone bill pay until 2013
- Pay last estimated state payment in 2013
- Bunch itemize deductions into 2013/use the standard deduction in 2012
These are a few ideas, however,
it is important to remember that each tax situation is different and you must
consider your unique and individual circumstances above all else. We would be glad to help with your year-end
planning in this year of complicated tax uncertainties. Please call our office for more information
or to make an appointment with a Saltmarsh tax professional at (800) 477-7458.
--Lisa Fairbanks, CPA
