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Scan the image below to read Mr. Crawford's Bio
Jacksonville:
1200 Riverplace Blvd.
Suite 800
Jacksonville, FL 32207
ph. 904.398.0900
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Beaches:
2215 3rd Street South
Suite 101
Jacksonville Beach, FL
32250
ph. 904.285.8760
www.marksgray.com
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2013 Tax Planning and 2014 Tax Resolutions
As you hustle and bustle at this time of t he year and the stockings are hung by the chimney with care your thoughts are most likely not about taxes! However, it would be in your best interest to plan ahead and do some early tax planning. The earlier you begin your planning, the more opportunities you may have to save. Below are some tips to think about for the upcoming tax season.
1. Assess your current tax picture. Consider if any current personal or financial circumstance may impact your 2013 taxes. Examples include changes in marital status, a birth or death in the family, helping a child pay for college and the effect of the American Taxpayer Relief Act. While ATRA prevented income tax increases for most taxpayers, taxpayers in higher income tax brackets will see an increase from 2013-2014. Please see Fiscal Cliff section below for more details.
2. Itemized deductions. Financial and tax professionals continually look for ways for their clients to save on taxes. Big deduction items include home mortgage interest, charitable deductions and property taxes. But you don't benefit from itemized deductions unless your deductions exceed the standard deductions ($12,200 for married couples in 2013, increasing to $12,400 in 2014). If you are borderline, you should consider paying as much as you can in alternate years to be able to itemize, then reducing deductibles items in other years when you can take the standard deduction.
3. Deferring taxes on income. Another key to effective tax planning is recognizing the importance of weighing the advantages and disadvantages of tax deferring strategies. Stocks have substantial gains this year; if you have any unused capital losses from prior years, you may want to consider taking some of those gains in 2013. If not, you will likely want to defer any sale decision until 2014. Many individuals participate in an employer-sponsored 401(k) plan or something in similar, which is a logical choice as the savings are not taxed. If you're not in an employer plan, you have until April 15 to contribute to an individual retirement account (IRA). Such a contribution to a traditional IRA will save 2013 taxes. |
Consider Adding or Converting to a Roth IRA.
If you're getting close to retirement age, consider a Roth IRA; while it won't save you on current taxes, it will have much longer to grow tax-deferred savings since you don't start withdrawing the funds until age 70½. Further, if you have favorable tax attributes that can help offset the majority of the conversion income, have a long range plan to let the funds grow or if you anticipate staying in a high tax bracket in the future, conversion of your traditional IRA to a Roth IRA may be advantageous. The contribution limit for IRA's will be maintained at $5,500 in 2014. Individuals 50 and older can still contribute an additional $1,000. 2014 will bring increased IRA income limits and higher Roth IRA income cutoffs. Click here to read more. |
After the Fiscal Cliff
After the much speculation whether the American Taxpayer Relief Act would be passed, it was! Now what? Keep in mind that higher income taxpayers will pay an additional 3.8% surtax on certain investment income. While couples must have over $250,000 of modified adjusted gross income to be affected, trusts get hit with the tax at only $11,950 of income, so trustees should seriously consider distributing trust income to beneficiaries who will not be subject to the surtax. The estate and gift tax exemption remains at a historically very high level and will increase from $5.25 million to $5.34 million in 2014, giving an increased incentive to make gifts next year, particularly with the gift tax exclusion staying at $14,000. Click here to read an overview of 2014 Estate Tax, Gift Tax and Generation Skipping Transfer Tax Laws. |
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In Conclusion
Taxes continue to become more complicated; however, there are substantial areas where a little bit of planning can save a lot of expense. The good news? A Florida Board Certified Tax attorney can guide you through the uncertainty that our current economic environment provides. Please contact me here.
Happy Holidays! |
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