|
|
|
A Guide for Clients of Whalen & Company, CPAs and Consultants
|
| e-Publication | October 2012 |
|
Greetings!
With the continued uncertainty about the economy and tax laws, tax planning is more important than ever. You need to proactively look for ways to reduce your taxable income and take advantage of every tax break you're entitled to -- while they're still available.
That is exactly what our 2012-2013 Tax Planning Guide is designed to help you do. As you look through this guide, please note the strategies and tax-law provisions that apply to your situation or that you would like to know more about. Then call us with any questions you may have about these or other tax matters.
This electronic publication is linked to our website, which contains more detailed information on taxes and tax planning. If Congress takes action after the November election or in the first or second quarters of next year to change tax laws, we will update our website Tax Guide, so you will always see the most current tax information.
We hope this e-Publication and Web Tax Guide are helpful to you. If you have comments about this guide or other suggestions, send us an email. |
|
TAX PLANNING BASICS
Consider applicable rates, breaks and limits as well as possible tax law changes to better time income and expenses.
Tax law uncertainty makes planning especially challenging this year. Regular tax rates are scheduled to rise in 2013, but current rates might be extended for some or all taxpayers. And which tax strategies will be best for you will depend in part on whether your rate next year will be higher, lower or the same.
Read more for information about alternative minimum tax (AMT), timing income and expenses, miscellaneous itemized deductions, health care breaks, sales tax deduction, employment taxes and estimated payments and withholding.
|
INVESTING
Tax planning for investments is complicated.
The tax consequences of your investment decisions can have a major impact on your return. While tax consequences should never drive investment decisions, it's critical that they be considered before making any moves - especially this year. Why? Because whether an investment move is made in 2012 vs. 2013 might mean a significant difference in tax liability. Review information about capital gains tax and timing, the wash sale rule, loss carryovers, the 0 percent rate, mutual funds, small business stock, passive activity losses, income investments and investment interest expense.
|
REAL ESTATE
Whether an abode or an investment, real estate provides valuable tax-saving opportunities.
Despite the slow-to-recover real estate market, real estate remains a significant part of many taxpayers' net worth. So taking advantage of the valuable tax-savings opportunities it offers is critical. But those opportunities vary based on such factors as whether the real estate is your home or vacation home vs. a rental or investment property.
Click here to learn about home-related tax breaks, home office deduction, home rental rules, home sales, real estate activity losses and tax deferral strategies for investment property.
|
BUSINESS AND EXECUTIVE COMPENSATION
Thinking beyond your company's income, expenses and tax breaks
 If you're a business owner, your tax planning may be focused on your company's income and expenses and the various tax breaks that may apply. But it's also important to think about other tax ramifications of owning a business.
Find out more about projecting income, depreciation, vehicle-related tax breaks, manufacturers' deduction, employee benefits, NOLs, tax credits, business structure, exit planning, sale or acquisition, incentive stock options, nonqualified stock options, restricted stock and NQDC plans. |
FAMILY AND EDUCATION
Paving the way for children's financial security
One of the biggest goals of most parents is that their children become financially secure adults. To pave the way, it's important to show young people the value of saving and provide them with the best education possible. By taking advantage of tax breaks available to you and your children, you can do both. If you're a grandparent, you also may be able to take advantage of some of these breaks - or help your grandchildren take advantage of them.
Learn more about tax credits, dependent care FSA, employing your children, Roth IRAs for teens, the "kiddie tax," saving for education, ESA pluses and minuses, 529 plan pluses and minuses, jumpstarting a 529 plan, education credits and education-related deductions.
|
CHARITABLE GIVING
Support causes you care about
and save tax, too.
Donations to qualified charities are generally fully deduct�ible for both regular tax and AMT purposes, and they may be the easiest deductible expense to time to your tax advantage. After all, you control exactly when and how much you give. To maximize your deductions, carefully choose what you donate. Many rules and limits apply. Finally, in an election year, it's important to remember that political donations aren't tax deductible.
Click here for information about cash donations, stock and other types of donations, making gifts over time, charitable remainder trusts and charitable lead trusts.
|
|
Tax-advantaged plans can provide significant benefits, but watch out for the pitfalls.
 High-income taxpayers can reap the greatest benefits from tax-advantaged retirement plans. Although annual contributions are limited, tax-deferred (or tax-free, in the case of Roth accounts) compounding can have an expo�nential effect on your return on investment. And generally the higher your tax rate, the greater the tax deferral (or tax savings). But many rules apply, so it's important to understand not just the benefits but also the pitfalls. Read more about 401(k)s and other employer plans, traditional IRA, Roth options, plans for business owners and the self-employed, early withdrawals, leaving a job and required minimum distributions. |
ESTATE PLANNING
Why estate planning continues to be a challenge
Estate planning is never easy. You must address your own mortality while determining the best strategies to ensure that your assets will be distributed according to your wishes and that your loved ones will be provided for after you're gone.
Learn more about estate tax, gift tax, GST tax, state taxes, tax-smart giving, trusts and life insurance.
|
Our comprehensive electronic guide will be automatically updated through June 30, 2013. So if Congress and the president make revisions to tax-law provisions, you can count on our Web Tax Guide for the most current tax information.
|
|
|
TAXING QUESTION
What tax law changes are in store for 2013?
Many 2012 tax rates as well as various tax breaks are scheduled to expire Dec. 31, increasing taxes for most taxpayers. In addition, the health care act, upheld by the U.S. Supreme Court earlier this year, might increase your taxes for 2013 and beyond.
But Congress may extend current rates and breaks - or reduce rates and make changes to breaks - for some or all taxpayers. It also could repeal the health care act.
Read more to learn how changes in tax law may affect you or your business. |
|
Helping you get prepared for filing your personal income tax return is a priority for our firm, and we seek to communicate effectively and efficiently based on your preferences. Unless we were notified to the contrary, we will again be sending organizer information to you by email.
The information in the organizer helps us identify credits and deductions that may apply to clients and maximize your overall tax savings. Taking the time to complete the organizer ensures that your tax adviser has up-to-date information and highlights areas that may result in tax savings. To see a sample of the questionnaire in the organizer, click here.
The organizer should be returned to the office by no later than Friday, March 15, to ensure the timely completion of your income tax return.
If you are unable to provide the information by March 15, we may need to apply for a filing extension for you.
|
|
Calculating Your Retirement Needs 
When retirement was years away, calculating how much income you may need may have involved a lot of estimates. Now you can be more accurate.
To learn more from Eric Bishoff of The Bishoff Financial Group about the factors to consider, including the length of your retirement, earned income and your retirement lifestyle, and what steps to take next in planning for your retirement, click here.
|
WORKSHOP IN JANUARY
College Planning and Funding Strategies
On January 29, Whalen & Company and The Bishoff Financial Group will team up to help families learn more about investment vehicles to fund college education, how to identify good-fit colleges and universities, and strategies to get accepted. Participants will also learn ways to minimize time spent on the completion of the Department of Education's Free Application for Federal Student Aid (FAFSA). This session is ideal for parents and grandparents of middle and high school students.
Save the date and place - Tuesday, January 29, 7 p.m. to 8:30 p.m. at the Whalen & Company office, 250 W. Old Wilson Bridge Rd., in Worthington. Look for more details and registration information in December.
|
|
Be aware that the year-end planning ideas discussed within this e-Publication are general in nature and are intended only to provide an overview. We suggest that you review your situation with your Whalen & Company tax professional before you take any action.
|
|
|
|
|
|
|
|
|
