- Always take a sensible approach when it comes to tax planning. Structuring transactions strictly on the tax consequences is seldom a good idea. Your investments, family financial planning, and business activities should have economic merit apart from the tax considerations.
- If you’re facing college or other education bills this fall, check out the tax breaks for education expenses. There are several tax credits and deductions, but maximizing the available tax benefits can be complicated. For help in reviewing the tax breaks available in your situation, contact our office.
- Put your investments in the right place. To take best advantage of the lower long-term capital gains tax rates, investments that produce capital gains should be held in taxable accounts and those that produce interest income should be held in tax-deferred accounts (like your IRA or 401(k) plan). If you put capital gain investments in tax-deferred retirement accounts, you could turn income that would be taxed at lower rates into ordinary income taxed at higher rates.
- Don’t let penalties for underpaid taxes increase your tax bill next April. Check the total you’ve paid in for 2015 through withholding and/or estimated taxes. If you’ve underpaid, consider adjusting your withholding for the final months of 2015 or increasing your remaining quarterly estimate. If you employ household workers, be sure your calculations include the payroll taxes you’ll owe for them.
- Review your investment portfolio to see if you should sell some losers to offset investment gains you’ve taken this year. You might want to sell enough investment losses to exceed gains by $3,000, the amount of net capital losses you can use annually to offset other income.
The information on this site is general in nature and should not be acted upon in your particular situation without further details and/or professional advice. For assistance, contact our office.
