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Wilmington Trust's Top 10 Year-End Tax, Wealth Tips

By Dan Weil   |   Monday, 16 Dec 2013 11:51 AM

Wilmington Trust Corp. put together a top-10 list of tax, investment and estate tips for wealthy taxpayers to utilize before year-end.

1. Take advantage of tax provisions that expire Dec. 31. These provisions include some itemized deductions for wealthy taxpayers and business owners.

2. Make charitable donations. This year's tax-rate increases now make those donations even more valuable for tax savings.

Editor’s Note:
Add Up to $152,046 to Your Social Security Benefits Using Weird Trick

3. Make annual exclusion gifts. Individuals can give gifts of up to $14,000 to an unlimited number of people without incurring a gift tax.

4. Set up a 529 Plan for college savings. The income from the plan isn't taxed if it's used to pay for higher education expenses.

5. Review your investment portfolio. This year's higher capital gains tax rate means you should be more cautious about recognizing gains and more aggressive in taking losses, Wilmington says.

6. Plan for the new 3.8 percent surtax. Starting this year, wealthy taxpayers face a 3.8 percent surtax on their investment income to help pay for Obamacare. But there are a few ways to keep your income below the surtax threshold, such as harvesting losses and converting a regular IRA to a Roth IRA.

7. Take advantage of low interest rate planning. Estate planning strategies can utilize the current low rates for loans and for valuing annuities.

8. Review your estate and gift tax planning. "Whether or not you made large gifts in 2012, it is important to review your current estate plan to make sure it works under the existing tax laws," Wilmington explains.

9. Learn about planning options for today's modern family. "Married couples may defer estate taxes until the death of the surviving spouse by taking advantage of 'portability,' a feature of federal tax law made permanent in 2013," the report says. "Portability allows a surviving spouse's estate to use the deceased spouse's unused federal estate and gift exemption, in addition to his or her own exemption."

10. Take advantage of expiring tax provisions for business owners. This includes the research expense credit.

"This fall we weathered the debt ceiling crisis and the government shutdown, and we will be watching Congress as we head to year-end to see if it takes action on expiring tax provisions and the budget," the report states.

Editor’s Note: Add Up to $152,046 to Your Social Security Benefits Using Weird Trick

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