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The best tax planning decisions are made with the benefit of time,

thoughtful consideration, and trusted professional advice. As tax time

approaches, now is the time to organize and prepare for sound long-term financial decisions and minimize

expenses, and taxes.

In preparing for this year's tax filing, begin to organize tax records including year-end investment statements, capital gains and losses from asset sales, transaction records from real estate transactions, interest and dividend records for the year (1099s), payroll and withholding statements (W-2s), records corresponding with deductible expenses such as property taxes and insurance, business income and expense records, etc. Some of these will not come until January or February of the following year.

Organize Your Tax Records EarlyOrganize Your Tax Records Early

Consider timing of controllable income and deductions to take advantage of any irregular income swings. Defer income until 2015 and accelerate deductions for 2014. Deferring income is also favorable for those taxpayers who anticipate being in a lower tax bracket next year. It must be noted, however, that in some cases, it may be beneficial to accelerate income into 2014. This may be the case for a taxpayer whose marginal tax rate is much lower this year than it will be next year. Even consider requesting your employer to hold on to your bonus check.

Consider if you should accelerate or defer income or expenses

Consider if you should accelerate or defer income or expenses

Determine whether you are likely to be subject to the Alternative Minimum Tax (AMT) and if those actions could trigger this tax. Many deductions used to calculate regular tax are disallowed for AMT purposes, some of which include the deductions for state income taxes, real estate taxes, miscellaneous itemized deductions, and personal exemption deductions. Do not accelerate these deductions when you are, or suspect you might be, subject to the AMT.

Determine if you will be hit by AMTDetermine if you will be hit by AMT

Take losses on stocks and mutual funds in order to offset any taxable gains realized during the year. However, annual deductible capital losses are limited to $3,000 in excess of your gains.

Consider selling selected stockConsider selling selected stock

If you plan to make charitable donations, consider donating appreciated capital gain assets (e.g., stocks) rather than cash. By doing so, you avoid the capital gain tax and 3.8% net investment income tax.

Consider donating appreciated stockConsider donating appreciated stock

Estimate your tax liability ahead of time and if you are likely to owe some tax, consider making estimated tax payment now rather waiting till time to file your return to avoid or reduce estimated taxes. Consider paying your fourth-quarter estimated state income tax payment as well as your real estate property taxes in December 2014, unless you are likely to be subject to AMT

Calculate and pay required estimated taxCalculate and pay required estimated tax

It may be beneficial to group your miscellaneous itemized deductions in the current year or next year. These deductions are allowed only to the extent that they exceed 2% of adjusted gross income (AGI), as well as medical expenses, which are taken only in excess of 10% of your AGI.

Group your miscellaneous deductionsGroup your miscellaneous deductions

Maximize your contributions to Retirement and 401(k) plans. When you have a business, contributions to a plan reduce your taxable income. If you currently have a traditional IRA, you may benefit from converting to a Roth IRA, which will allow you to transform a tax-deferred future growth into tax-free growth. You will pay taxes on the IRA asset value converted to a Roth. Be aware that you may pay taxes on the rollover and the income from the conversion will raise your AGI and may trigger NIIT, additional Medicare tax, or itemized deduction phase-outs. If you have already converted assets from a traditional IRA to a Roth IRA earlier this year and the assets in the Roth IRA account declined in value, you will end up paying higher taxes than needed. In this case, you can choose to reverse the transaction by transferring the converted amount from the Roth IRA back to a traditional IRA using a trustee-to-trustee transfer. You can then choose to re-convert the IRA to a Roth IRA at the current, lower market value.

Using retirement plan options to save taxesUsing retirement plan options to save taxes

If you are eligible to make contributions to your Health Savings Account (HSA), you can still maximize your 2014 contribution before year-end so you will have a full year’s worth of deductible HSA contributions.

Depending on what state you leave in and what education plan you select, you may be eligible to get deduction or contributing to an eligible sec. 529 plan. Similar to ROTH IRA, funds will grow tax free as long as it is used for the beneficiary’s higher education purpose.

Deadline for HSA and Sec 529 plan contribution is December 31Deadline for HSA and Sec 529 plan contribution is December 31

When you reach the age of 70½, you must take required minimum distributions (RMDs) from your IRA, 401(k) plan, and other qualified retirement plans. If you turned 70½ this year, you should consider delaying the first required distribution to 2015, and defer the income for one more year. This will benefit many, but not all, people, depending on their income situation in 2014 and 2015

Required Minimum Distributions (RMD)Required Minimum Distributions (RMD)

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