I make it my practice here at Long Island and Stamford Tax Preparation Central to put this weekly blogpost together on a Monday — and today, of course, happens to be “Cyber Monday”.
Remember those days when we all had dial-up modems at home and it actually made sense to do your shopping while at work? (And, of course, presumably while your boss wasn’t looking!)
Now, it’s pretty much just another excuse for a sale. Far be it from me (as a Long Island and Stamford business owner) to decry hustling businesses making their way, but it all seems fairly played out at this point — wait! Hold on as I buy that calculator on Amazon … I’m getting an incredible deal today … ok, I’m back.
What was that I was saying?
Well, in all seriousness, this week after Thanksgiving is the time when our (meaning that of Team Kessler) preparation for the upcoming tax season begins in earnest. Truly, things are coming across my desk in a way that we haven’t seen for a few months, but I’ve come to expect it for this time of the year. I absolutely love what I get to do — helping regular Long Island and Stamford families and businesses save on their taxes … but it does add some oomph to the “holiday rush”.
And one of the primary things we do right now is the rush of last-minute tax planning moves. Because as I’ve said before, preparing a tax return is a defensive, retrospective action … but making the right moves ahead of time is going on the offensive, and affects the future.
Which means I like that far better for you.
But here are some quick ideas for you, which hopefully we can discuss in person or via phone ((516) 449-2852 or (203) 658-5092) before the end of the month/year.
Michael Kessler’s Tax Moves for December 2013
“The only person you are destined to become is the person you decide to be.” -Ralph Waldo Emerson
When we make informed tax decisions, it is always best, of course, to start with real data. That’s why a good first step in any tax planning environment is preparing a draft tax return, to see where things stand before you make any hasty moves. Obviously, this is something we at Team Kessler would be doing on your behalf (if you’re one of our Long Island and Stamford tax preparation clients), unless you want to navigate the software for a few hours. That is up to you. (And no — you don’t have to fill in every line of your 2013 Form 1040. But a down-and-dirty analysis of what your upcoming tax return might look like could reveal some tax areas that you need to take care of by Dec. 31.)
Next, it’s always a good idea to harvest tax losses: Did you sell some assets earlier for a nice gain? Or are you expecting your mutual funds to provide you with a nice payout of dividends and/or capital gains distributions? Look for some losers in your portfolio to offset that added income.
Take a quick look at your withholding — and you can make some last-minute shifts to ensure that you aren’t overpaying, or to prevent yourself from being slapped with an underpayment penalty (yes, those do exist).
And then, of course, we move to the meat of your possible moves. Before December 31, we can help you look into…
• Winterizing your home with upgrades that qualify for the energy efficiency tax credit of up to $500.
• Spending down your medical flexible saving account (FSA) balance.
• Bunching deductible expenses, both miscellaneous and medical.
• Maximizing the sales tax deduction with a tax-qualifying major purchase.
• Giving to your favorite nonprofit.
• Paying next semester’s college costs early and counting the costs toward the American Opportunity tax credit.
• Considering ways to defer income if it will push you into a higher tax bracket.
All of these (and more) are good options to make a dent in your 2013 tax bill. Help us help you make the right decisions and call: (516) 449-2852 or (203) 658-5092 to set up a year-end tax planning appointment.
To your family’s well-planned saving over the holidays…