Here are some tips for planning last minute tax savings for business tax payers.
As always there are ways to tweak your 2013 tax bill, but not very much time left to do so. Before making any decisions please see my last post “Wag The Dog: Don’t Let The Tax Tail Wag The Financial Dog!” and keep those items in mind.
There are numerous new rules that kicked in 1 Jan 2013 and more that will be coming into play for 2014. Remember these are as of today and we never know what changes in legislation will be passed at the last minute (or in last years case after the last minute).
One of the biggest changes for businesses has to do with depreciation of business assets put into service in 2013. Businesses have grown accustomed over the last several years to the very lucrative rules allowing up to 100% bonus depreciation of new items placed into service. That has gone away completely for 2013 and future years. Other depreciation related changes include things not going into effect until 1 Jan 2014 such as the dramatic drop in the amount of allowed Sec 179 expenses, the loss of the shorter recovery period for certain improvements, and the changes in capitalization rules. Read More
Here are some tips for planning last minute tax savings for individual tax payers.
As always there are ways to tweak your 2013 tax bill, but not very much time left to do so. Before making any decisions please see my last Wag the Dog blog and keep those items in mind. The two biggest ways to adjust your taxes for 2013 are to increase your deductions before the end of the year or to decrease your income.
You can increase your deductions by doing things like making additional charitable contributions, paying your health insurance premiums in December instead of January, paying your January mortgage payment in December, paying your 2014 property taxes in 2013 instead of 2014, making a contribution to a traditional IRA before the end of the year or balance that stock portfolio and reap the losses you would take after the first of the year now.
You can decrease your income by increasing the contributions to your 401(k) or other employer sponsored retirement plan before the end of the year, making a contribution to a Health Savings Account, joining or increasing your cafeteria plan contribution, getting your boss to push that bonus or pay raise into 2014, or hold off on balancing that stock portfolio until after the first of the year if you look to make some gains. Read More