Before you get set to enjoy the holiday season, take a look at steps you can still squeeze into 2014 to minimize your taxes. Here are some possibilities.
* If you're
feeling charitable, consider giving appreciated stock to a favorite charity. You
will avoid capital gains tax on the appreciation while claiming a tax deduction
for the market value of the stock.
* Use
your credit card to pay tax-deductible expenses by December 31 if you're short
of cash. You'll be able to deduct the expenses on your 2014 return even though
you don't pay your credit card bill until 2015.
* Make
your January mortgage payment before December 31 to squeeze an extra interest
deduction into 2014.
* Make
tax-free gifts to use your annual gift tax exclusion for 2014. You can give up
to $14,000 to as many individuals as you like without tax consequences. These
gifts to individuals are not deductible by you; nor are they taxable to the
recipients.
* If a
wedding or divorce is in your year-end plans, be aware that your marital status
as of December 31 determines your tax status for the whole year. Changing the
dates of a year-end event may save taxes.
* Consider
investing in a health savings account (HSA). You'll get a current-year tax
deduction for your contribution, while providing a savings account to use to
pay out-of-pocket medical expenses currently or in the future. An HSA is not a "use
it or lose it" plan. Any funds in the plan can be used in future years. Also,
be aware that you can make your 2014 contribution up to April 15, 2015.
For guidance in choosing the best year-end moves for your
situation, give us a call.
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