December 10, 2014

12 Tax Tips and a Happy New Year

While end-of-year finances and tax tips aren’t nearly as entertaining to review as Houston Chronicle’s recent EOY article Houston’s 50 Most Fascinating People of 2014, they’re still worth a peek to make sure your numbers ring in a Happy New Year. After all, the more tax savvy you become by end of year, the more your April will be filled with cheer.

 Here’s your list; check it twice.

  • Make sure you’re aware of expiring tax breaks. Note that the Senate Minority Leader Mitch McConnell reports HR 5771, the Tax Increase Prevention Act of 2014 (TIPA), will pass before adjournment essentially extending a mixed-bag package of 54 tax relief provisions that expired at the end of 2013.
  • Remember to defer income and increase deductions…quickly.
  • Consider harvesting your tax-losses to cut down capital gains.
  • Account for refinancing – a lowered mortgage interest rate, results in a lower interest deduction.
  • Double-check your 2014 tax payments to make sure there aren’t shortfalls and recalculate your withholdings.
  • Avoid the Alternative Minimum Tax (AMT), if you can.  Deferring property tax payments to the following year may be one solution.
  • Ensure you are contributing the maximum allowable to your retirement account.
  • Remember the Roth IRA we talked about? If you qualify, reconsider or reexamine the rollover.
  • Consider donating long-term appreciated securities to your favorite charity.
  • Work from home? Deduct some of the cost of your home office with the simplified, new safe harbor deduction.
  • Think about Above-the-line deductions to reduce adjusted gross income (AGI).
  • Check your list twice. Plan for the future and think about cash flow, health care, retirement, investment and estate planning. Review and refresh wills, powers of attorney and any other sensitive documents that could need updating.

We hope you’ll find this jolly round-up helpful.

As always, the Maddox Thomson team is here to help. Call or email us at [email protected].