The holidays are right in front of us and before we know it, the New Year is here and time has run out to make smart tax moves. You may be able to save thousands on your tax bill with a little bit of strategy now.
At this moment, there are more than 50 business and individual tax breaks that have not been extended by the lawmakers in Washington. Chances are, once the November 4th mid-term elections are over, the tax breaks will be extended but that’s not guaranteed.
Some of the tax breaks waiting to be extended are private mortgage insurance payments, itemized claims for state and local sales taxes and higher education tuition and fees deduction.
On June 12th, 2014, the House passed two bi-partisan bills to permanently extend tax credits that had expired the end of 2013. The vote was 272-144, known as Section 179 allowing small businesses to write off up to $500K worth of investments a year. The other bill was to help small businesses (S Corporations) with charitable contributions and tax cuts. That vote: 263-155. Both bills are sitting in the Senate, waiting to be voted on.
Try to calculate or estimate your tax bracket now. If you’re close to the top of your bracket, or have just crossed into a higher tax bracket, there are several moves you can make to get into a lower bracket such as:
– If you receive a bonus at the end of the year, ask your boss to delay the bonus until 2015, deferring taxable income.
– Delay selling any type of asset in 2014 that will yield a capital gain.
– If you’re a small business, wait to send your invoices out until after the first of the year.
If you have a workplace retirement fund, add the maximum amount of money into that plan. The maximum employees can put into their 401(k) is $17,500 per year. If you’re 50 or older, you’re allowed an additional $5,500 (or $23,000 per year).
Another area to check at work is if you have a medical flexible spending account (FSA). You can contribute up to $2,500 through paycheck withdrawals. Remember, the FSA amount has changed due to the Affordable Care Act. Before the ACA, there was no limit.
The stock market has taken a tumble lately creating capital losses for many. These losses could help defer your income. Check with your tax attorney if facing the 3.8% surtax, (Net Investment Income Tax) which is part of the Affordable Care Act.
Go over other areas of tax losses, homeowner tax breaks (make an extra mortgage payment at the end of this year), itemize and bunch your deductibles, look into opening an IRA, pay tuition costs early and give to charities. Don’t wait until the last minute.
Denver tax attorney Tyler Murray, LL.M., of the Gantenbein Law Firm, is an experienced, licensed tax attorney with his Masters in Tax Law. He is located in Denver and serves all of Colorado. Mr. Murray is fond of tax planning and saving his clients money.
If you have tax planning or tax filing needs, and want to save money, contact premier Denver tax attorney Tyler Murray at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you. Visit our TAX WEBSITE for more information.
Tyler Murray is also a skilled, efficient Denver tax audit lawyer, helping his clients with alternative resolutions to tax audits and tax debt relief. His Denver tax attorney practice also includes business formation and corporate taxes, tax appeals, tax litigation, tax deficiencies, estate taxes, tax repayment plans, tax audit defense services, estate taxes and more.
Gantenbein Law Firm practice also includes Colorado Foreclosure Defense, Colorado Real Estate Law, Federal and Colorado Tax Law, Colorado Business Formation & Representation and Colorado Family Law. This combination is exceptional in that it provides our clients a complete and full perspective of the most common issues surrounding your unique assets or tax issues. For more information on these areas of practice, visit our WEBSITE