Brian Livesay The San Diego Retirement Guardian says “Knowing were the tax payer stands as the year comes to an end ensures the least amount of required taxes are paid by the tax payer. Yearend planning is essential. The tax code is complicated and advice should come from a qualified tax advisor.”
Tax planning is essential to get the most benefit from the tax code. Knowing what to look for as the year draws to an end will benefit the tax payer a great deal when it comes time to file a tax return. Using the tax code to avoid paying too much in taxes is legal and should be done by every tax payer. There are a number of areas were a tax payer has some control over the timing of payments or income that will benefit the tax payer when the yearend return is filed.
First knowing how much income for the year and allowable deductions the tax payer has gives the tax payer an idea of which tax bracket they will fall into and how close they are to the next tax bracket. Avoiding going into the next tax bracket by not taking any controllably timed income at year end will limit the tax payer’s tax burden for the year.
Deductions can also help control which tax bracket the tax payer will fall into for the tax year. If the tax payer’s Itemized Deductions are greater than the Stand Deduction the tax payer has some flexibility in the timing of payments that will reduce their taxable income for the year. Prepaying property taxes allows the tax payer to take a bigger deduction in the year the payments were made thus reducing taxable income by the amount of prepayment if the tax payer was already able to Itemize for the year. Making more charitable donations also by year end is another way to reduce taxable income. If the tax payer has medical expenses that exceed 10% of their Adjusted Gross Income the tax payer may what to schedule needed medical or dental procedures before year end to ensure the expenses can be deducted on the current year’s tax return.
Another area were timing can be used to benefit the tax payer is investment income. If a tax payer has recognized losses in a given year the taxpayer may want to sell any stocks that have appreciated in value since the lose will offset the gain. The tax payers Adjusted Gross Income will not be affected by these gains allowing the tax payer to avoid paying any tax on the recognized gains.
For more information visit Brian Ray Livesay’s Who Is Page here in the Journal
Brian Ray Livesay The Retirement Guardian
You may contact him at his office
Livesay Capital Solutions Inc.
1761 Hotel Circle S. Ste 360
San Diego, CA 92108
Call at 866-726-0725 / 619-281-8377
Or visit his Web Site www.retireestaxgroup.com