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Tax Planning

When you outgrow the "fast food" of tax services and are ready for tax strategy, Richardson & Associates can help you. We can help you plan for the future and review your previous returns.

 We act as your personal tax advisor and are dedicated to making sure you make sound personal and business decisions tax wise. Whatever you need to do, whether you need to sell your home or purchase new facilities for your business, we are always by your side to advise you on your tax matters. 

 We also conduct high-quality tax research for our clients at an affordable rate to identify tax risks and savings opportunities and develop strategies to ensure tax optimization.

Tax Saving Tips

As we approach year end, you have limited time to do some year-end tax planning but it is still not too late! Just act fast and follow some great tax saving tips from Richardson & Associates Tax team to maximize your tax savings. Always remember we are “Accounting for Your Success”®!

Accelerate Income and Maximize Deductions

Accelerating income is an especially good idea for taxpayers who anticipate being in a higher tax bracket next year or whose earnings are close to threshold amounts that make them liable for additional Medicare tax of 0.9% on their tax returns.

Here are some great examples/ tax saving tips to accelerate income.

  • If you're self-employed, you can send invoices or bills to clients or customers this year in order to be paid in full by the end of December.
  • If you are expecting a bonus at year-end, try to get it before December 31.

In the meantime, you can do the following to maximize tax deductions if your tax bracket is expected to be higher in 2016:

  • Pay a state estimated tax installment in December instead of at the January due date.
  • Pay your entire property tax bill, including installments due in year 2016, by year-end.
  • Try to group "threshold" expenses, such as medical expenses and miscellaneous itemized deductions. For example, you might pay medical bills and dues and subscriptions in whichever year they would do you the most tax good.

Strategize Tuition Payments

The American Opportunity Tax Credit, which offsets higher education expenses, was extended to the end of 2017. It may be beneficial to pay 2016 tuition in 2014 to take full advantage of this tax credit, which is up to $2,500 per student. 

Investment Gains and Losses

Starting in 2013, a 3.8 percent Net Investment Income Tax is applied to investment income such as long-term capital gains for earners above certain threshold amounts. This is something to think about as you plan your long term investments. For example, taxpayers below threshold might want to take gains; whereas taxpayers above threshold amounts might want to take losses.

You might also minimize taxes on investments by tring to avoid short-term capital gains, which are usually taxed at a much higher tax rate than long-term gains. If your tax bracket is either 10% or 15%, then you might want to take advantage of the zero percent tax rate on qualified dividends and long-term capital gains. If you fall into the highest tax bracket (39.6%), the maximum tax rate on long-term capital gains is capped at 20% for tax year 2013 and beyond.

Maximize Retirement Plan Contributions

  • If you own a business, consider setting up a retirement plan if you don't already have one. (It doesn't need to actually be funded until you pay your taxes, but allowable contributions will be deductible on this year's return.
  • If you are an employee and your employer has a 401(k), contribute the maximum amount, plus an additional catch up contribution of $5,500 if age 50 or over.
  • If you are employed or self-employed with no retirement plan, you can make a deductible contribution of up to $5,500 a year to a traditional IRA (deduction is sometimes allowed even if you have a plan). Further, there is also an additional catch up contribution of $1,000 if age 50 or over.

Year-End Giving To Reduce Your Potential Estate Tax

  • Charitable contributions. Making cash or non-cash charitable donations is going to increase your Schedule A deduction so that you could take itemized deduction for your tax instead of standard deduction.

  • Gift Tax. For many, sound estate planning begins with lifetime gifts to family members. In other words, gifts that reduce the donor's assets subject to future estate tax. Such gifts should be made at year-end, during the holiday season, in ways that qualify for exemption from federal gift tax. Gifts to a donee are exempt from the gift tax for amounts up to $14,000 a year per donee.

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