Tag: Year-End Tax Planning For Individuals By Gregory W. Beck
As Americans across the country rang in the new year, many were unaware that, at midnight, more than 50 different tax breaks expired. According to the Tax Foundation, among them were credits for everything from building motorsports facilities, producing biofuels, conducting business research and development, and even training a mine rescue team.
Clearly, the U.S. tax system can be very complex. Understanding the basics, especially the different types of taxes you may face, can be a valuable tool in financial planning.
Not all taxes are paid at the same time. Some, for example, are deducted from your paycheck. “Generally, three types of taxes will show up on a worker’s pay stub: federal income taxes, payroll taxes (Social Security and Medicare), and state income taxes,” Andrew Lundeen, manager of federal projects at the Tax Foundation, told 24/7 Wall St.
In January 2013 President Obama signed into law the American Taxpayer Relief Act.
Although there were many provision and tax increases, there were also some interesting opportunities. In the third and final installment regarding the 2012 Taxpayer Relief Act, Greg discusses changes to the Alternative Minimum Tax, Estate Tax rules and other provisions to this law.
To schedule a FREE, 30 minute consultation with Gregory W. Beck, CPA, please call (714) 538-1040.
Year-End Tax Planning For Individuals By Gregory W. Beck, CPA
In most years, taxpayers adopt a strategy of deferring income, but with the Bush-era tax cuts set to expire on December 31, 2012, income tax rates and capital gains taxes set to rise, and a 0.9 percent Hospital Insurance (HI) tax applicable to earnings of self-employed individuals or employee wages in excess of $200,000 ($250,000 if filing jointly) effective January 1, 2013, it might make more sense to accelerate income into 2012 instead of deferring it to 2013.