Tags: Tax | saving | tips | year-end

Tax-Saving Tips: AGI, Gains/Losses, Gifting and More

By    |   Sunday, 09 November 2014 08:16 PM

With the end of the year rapidly approaching, you want to make sure you've taken advantage of every opportunity to lower the tax bill you'll face April 15.

The Wall Street Journal cites several areas of importance. 

  • Adjusted gross income, the number at the bottom of the front page of Form 1040. AGI is particularly important for the wealthy. That's because the 3.8 percent surtax on net investment income and the 0.9 percent Medicare surtax imposed by Obamacare apply only to someone with an AGI above $200,000.
  • Investment gains and losses. In your taxable account, if you have realized large capital gains this year, you may want to sell some losing positions to reduce your capital gains tax burden.
  • Charitable giving. "Before you write a check, think twice," writes Journal reporter Laura Saunders. "Often a more tax-efficient move is to give the same value in appreciated assets, such as shares of stock. Donors often get a deduction for the full market value while avoiding capital-gains tax on the asset’s growth."

Accounting firm Grant Thornton offers the following year-end tax tips: 

  • "Accelerate deductions and defer income. Deferring tax is a cornerstone of tax planning.
  • Bunch itemized deductions. Many expenses can be deducted only if they exceed a certain percentage of AGI.
  • Leverage retirement account tax savings. It’s not too late to increase contributions to a retirement account.
  • Leverage state and local sales tax deduction. If you itemize deductions, you can elect to deduct state and local sales tax instead of state income taxes.
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With the end of the year rapidly approaching, you want to make sure you've taken advantage of every opportunity to lower the tax bill you'll face April 15.
Tax, saving, tips, year-end
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2014-16-09
Sunday, 09 November 2014 08:16 PM
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