Year End Tax Savings for Individuals

 

 

It’s not too late to consider tax moves that could reduce your 2013 taxes and

get you in a better tax position for 2014.

• Be aware of higher tax rates. In 2013 the top tax rate has been increased to 39.6%
for top bracket taxpayers (with taxable income over $400,000 for singles,

$450,000 for married taxpayers).
In addition, singles with income greater than $200,000 (or $250,000 for married
taxpayers) will be subject to the new 3.8% surtax on net investment income.

If you believe that you will be close to this limitation,

 consider making moves that will defer income into 2014.

• Take advantage of tax-deferred accounts. All of the new tax rates and phase-outs
are based upon adjusted gross income or taxable income.

The most efficient way to reduce both of those items is to maximize contributions
to tax-deferred retirement plans.

 If your employer offers such a plan, make maximum use of it
(such as a deferred compensation plan). If not, see if you are
eligible for your own deductible IRA.

• Consider a health savings account (HSA). Investing in an HSA gives you a current-
year tax deduction, while providing a savings account to use to pay

 out-of-pocket medical expenses currently or in the future.

 An HSA is not a “use it or lose it” plan. Any funds in the plan can be
used in future years. And be aware that you can fully fund your HSA

up to April 15th of the following year.

• Make charitable gifts from your IRA. Seniors age 70½ and older can make
charitable contributions directly from their IRA.

 While this won’t be deductible, it can apply against your annual required minimum
   distribution (RMD), thereby lowering your adjusted gross income
.

For guidance with your year-end tax planning, contact our office.
Call us at (219) 769-3616 with your questions, or email them to

 tlynch@swartz-retson.com.