There are only a few weeks left in 2013! If you have had significant changes in your tax situation during the year, or are unsure how the 2013 Affordable Care Act will impact you, now is the time to contact us for year-end tax planning.

 

The following are some situations that might affect your tax situation for 2013:

 

Change in Employment: If you have changed jobs during 2013, did you properly prepare Form W4 to declare exemptions? What affect will this have on your 2013 tax return?

 

Change in Marital Status/ Change in Exemption: Did you get married or divorced in 2013? Did you have a child or is your child no longer your dependent? These changes will affect your taxable income or you could be eligible for tax credits or deductions.

 

Purchase or Sale of a Home: A purchase of a home will allow for potential deductions of mortgage interest and real estate taxes. A sale of a home results in the loss of those mortgage interest and real estate tax deductions, as well as the possibility of a taxable gain, depending on the circumstances.

 

Retirement: If you retired in 2013, your tax situation may have changed. Are you receiving pension or IRA distributions and need to know the taxability of these distributions? Is there withholding on the distributions or do you have to pay estimated taxes? Are you collecting Social Security and if so, is any part of it taxable?

 

Additional Income:

Have you had any unscheduled income such as unemployment, bonuses, sale of investments? All of these can result in a tax surprise. 

   

End-of-Year Tax Moves to Consider:

 

blue square Delay Bonus Pay: If you think you will be in a lower tax bracket in 2014, and it is allowed by your company, defer your bonus.

 

blue square Prepay Mortgage Interest: By prepaying one extra month's interest, you will increase your 2013 mortgage interest deduction.

 

blue square Maximize Your Retirement Savings: Contribute the full amount to your company sponsored 401(k) plan. The maximum contribution for 2013 is $17,500 ($23,000 for

   individuals age 50 and older).

 

blue square Give to Charities: In order to deduct charitable contributions, you must itemize your deductions. The deduction is limited to 50% of your adjusted gross income for the year.

 

blue square Investment Sales:

If your investments did well in 2013 and you are facing taxable capital gains (possibly at
   20% for higher earners), consider selling securities that are at a loss to offset some of
   those capital gains. In addition, if you expect to be in a lower tax bracket in 2014, and
   have not yet incurred taxable capital gains, you may want to postpone the sales until
   2014.

 Questions? Contact Us. Click Here.

 

Linda M. Smith, Managing Partner

Kudos to Linda Smith for being awarded one of
Worcester Business Journal's 2013 Outstanding
Women In Business

 
 

Linda Smith and Maureen Sullivan
Questions?
Call us at 508.871.7178
 
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