Year End Planning: What to think about right NOW

Year-end planning is now a bit more interesting in 2013 with the impact of the Affordable Care Act, the end of various advantage

s under the American Taxpayer Relief Act (ATRA), and others. Below is a list of suggested topics to consider and questions to answer that may be helpful to reduce your 2013 tax exposure (note: this list isn’t all-inclusive):

 Individuals:

• What income bracket are you in this year and do you expect to be in a different bracket in 2014?

• If you think your income will increase (which bumps you to a higher tax bracket) is it worthwhile for you to accelerate income into this year or defer deductions to next year?

• Do you anticipate your income falling and moving into a lower bracket? Should you defer income to 2014 or accelerate your deductions to the maximum extent?

• If you’ve made money in 2013 on capital gains, what depreciated stocks or other capital assets might you unload to offset the gains and reduce your tax exposure?

• Do you plan to make end-of-year, tax-deductible charitable donations? If so, how much?

• A number of ARTA-related tax breaks are disappearing this year. Here’s more info on ATRA

• What’s new for 2014 that you could take advantage of next year?

• Have you made changes in your tax planning in light of the Affordable Care Act? Why or why not?

• Review your retirement plan. Are you on track? Are you saving enough?

• Consider timing of IRA contributions; when you make them can gain, or lose, tax advantages.

Businesses:

• Consider different tax accounting methods (ask your tax professional for guidance, especially when considering this!)

• If your business must comply with financial loan covenants, develop a year-end forecast to see if a danger exists of failing any of the covenants. If you identify a possible failure, create a strategy to meet the covenants or begin the process of obtaining waivers from your lender. Now.

• If your company is struggling don’t go into the new year without a financial plan. Meet with your accountant to develop a financial plan and a turnaround plan to stabilize your operations.

• The Section 179 limit for 2012 and 2013 is set at $500,000, with a $2 million investment limit.

• ATRA extended 50% Bonus Depreciation through 2013. Some transportation property may be eligible for the same 50% through 2014. 

Tax planning and compliance is a complex arena, and you’ll most likely benefit from the assistance of an accounting professional; after all, we think and study about these topics every day!

You don’t have to tackle your tax planning on your own; the professionals at Rodefer Moss are here to help you. Click here to find an RM office near you.