Year-End Tax Planning

Year-end planning will be more challenging than normal this year. Unless Congress acts, a number of popular deductions and credits expired at the end of 2013 and won't be available for 2014. Deductions not available this year include the generous 50 percent bonus first year depreciation and the $500,000 expensing allowances for business property. Several tax benefits have expired, including the research credit and the qualified charitable distributions that allow taxpayers over age 70½ to make tax-free transfers from their IRAs directly to charities.

Before we get to specific suggestions, here are two important considerations to keep in mind.

1. Remember that effective tax planning requires considering both this year and next year-at a minimum. Without a multiyear outlook, you can't be sure maneuvers intended to save taxes on your 2014 return won't backfire and cost additional money in the future.
2. Be on the alert for the Alternative Minimum Tax (AMT) in all of your planning, because what may be a great move for regular tax purposes may create or increase an AMT problem. There's a good chance you'll be hit with AMT if you deduct a significant amount of state and local taxes, claim multiple dependents, exercised incentive stock options, or recognized a large capital gain this year.

Here are a few tax-saving ideas to get you started. As always, you can call on us to help you sort through the options and implement strategies that make sense for you.

Read our full article to learn more about year-end tax planning considerations for your business including:

• Employing your child

• Checking your partnership and S corporation stock basis.

• Taking advantage of the "de minimis safe harbor election"  

You can also read about additional year-end tax planning considerations such as:

• Net investment income tax

• Harvest capital losses

• Securing a deduction for nearly worthless securities

• IRA required minimum distributions considerations

• Charitable giving

• Estate planning

Through careful planning, it's possible your 2014 tax liability can still be significantly reduced, but don't delay. The longer you wait, the less likely it is that you'll be able to achieve a meaningful reduction. Contact us for more information or download the Eide Bailly Year-End Tax Planning Guide for additional information.  

Eide Bailly's National Tax Office serves as a resource for clients to help analyze complex tax issues related to business decisions. Our professionals are committed to helping clients stay informed about tax news, developments and trends through various specialty areas, including cost segregation studies, wealth transfer, state and local taxation, international tax, IRS controversy and procedures, tax-exempt organizations and tax legislation.