Reducing Your Tax Bill Before The End Of The Year - New York News

The Willis Report

Reducing Your Tax Bill Before The End Of The Year

Posted: Updated:

If you're smart about your money, you've probably already started thinking about what you can do before the year ends to reduce your tax bill. There are lots of changes awaiting taxpayers April 15th thanks to the Affordable Care Act and the American Taxpayer Relief Act of 2012, not much of it good.

First things, first. If you have a large portfolio or earnings above $200,000, now is the time to run a simulation of what your taxes may look like for next year. That way, you can at least get a sense of what you'll be on the hook for come April 15, 2014.

Next, if you're expecting a bonus or year-end income that will push you into a higher bracket, consider deferring that money into next year. Hold off selling assets that will produce a capital gain. If you're self-employed, don't send out invoices for year-end jobs until early next year. Keep in mind, high earners are facing a new top tax bracket of 39.6 percent on taxable income of $400,000 for single earners and $450,000 for married couples.

Even if you aren't in the top tax bracket, it makes sense to salt more money into your 401(k). That will reduce your income reported to the IRS since most plan contributions are made before taxes are taken out. Remember if you are 50 or older, you can put in an extra $5,500 over the $17,500 limit.

Now is also a good time to review the limits on your flexible spending accounts. Under Obamacare, the limit on the amount you can set aside pretax was set at $2,500. (Before the ACA, there was no statutory limit on contributions.) Some companies allow a grace period to use untouched FSA funds, but not all. Plus, the Treasury recently announced changes to the use-it-or-lose-it rule. Now, account holders can carry over up to $500 in excess money into the next benefit year, as long as your company adopts that plan.

Also important to consider: The chances of mutual funds passing on long-term capital gains distributions are high. Fund companies release estimates of distributions this month. If you're planning on selling a fund, do it before distributions.

Now is also the time of year to consider charitable contributions. Make sure your contributions go to an eligible 501C3 organization so that you can take the deduction.  

 

  • Local NewsLocal NewsMore>>

  • Man with samurai sword arrested at New Jersey deli

    Man with samurai sword arrested at New Jersey deli

    Thursday, April 17 2014 9:27 AM EDT2014-04-17 13:27:28 GMT
    New Jersey NewsNew Jersey News
    Employees at a southern New Jersey deli say they feared for their lives when a man walked in and brandished a samurai sword. It happened at American Deli in Lower Township.
    Employees at a southern New Jersey deli say they feared for their lives when a man walked in and brandished a samurai sword. It happened at American Deli in Lower Township.
  • Rifle seized after squirrel shooting in Milford

    Rifle seized after squirrel shooting in Milford

    Thursday, April 17 2014 8:48 AM EDT2014-04-17 12:48:12 GMT
    Connecticut State NewsConnecticut State News
    Police say they found an unregistered assault rifle and three large-capacity magazines in the home of a Milford man accused of shooting a squirrel.  James Toigo has been charged with unlawful discharge of a firearm, cruelty to an animal, reckless endangerment, breach of peace, failure to register an assault rifle and possessing large-capacity magazines.
    Police say they found an unregistered assault rifle and three large-capacity magazines in the home of a Milford man accused of shooting a squirrel.  James Toigo has been charged with unlawful discharge of a firearm, cruelty to an animal, reckless endangerment, breach of peace, failure to register an assault rifle and possessing large-capacity magazines.
  • Harlem politician Basil Paterson dead

    Harlem politician Basil Paterson dead

    Thursday, April 17 2014 8:41 AM EDT2014-04-17 12:41:03 GMT
    Basil Paterson, the father of former New York Governor David Paterson, died Wednesday night at the age of 87. The trailblazing Democratic politician from Harlem served in the state Senate, as deputy mayor of New York City, as secretary of state of New York and was appointed by the New York Senate as a commissioner of the Port Authority of NY and NJ. In 1970, he ran for lieutenant governor, the second black nominee of a major party for statewide office in New York.
    Basil Paterson, the father of former New York Governor David Paterson, died Wednesday night at the age of 87. The trailblazing Democratic politician from Harlem served in the state Senate, as deputy mayor of New York City, as secretary of state of New York and was appointed by the New York Senate as a commissioner of the Port Authority of NY and NJ. In 1970, he ran for lieutenant governor, the second black nominee of a major party for statewide office in New York.
  • PoliticsMore>>

  • 3 Protesters Killed In Attack On Ukrainian Base

    3 Protesters Killed In Attack On Ukrainian Base

    Thursday, April 17 2014 11:00 AM EDT2014-04-17 15:00:14 GMT
    The turmoil in Ukraine dominated the European landscape Thursday, as three protesters were killed in a clash in southern Ukraine, high-level talks were held in Geneva and Vladimir Putin weighed in.
    The turmoil in Ukraine dominated the European landscape Thursday, as three protesters were killed in a clash in southern Ukraine, high-level talks were held in Geneva and Vladimir Putin weighed in.
  • NATO Ups Military Presence Amid Russian Threat

    NATO Ups Military Presence Amid Russian Threat

    Wednesday, April 16 2014 10:48 AM EDT2014-04-16 14:48:29 GMT
    NATO is strengthening its military footprint along its eastern border immediately in response to Russia's aggression in Ukraine, the alliance's chief said Wednesday.
    NATO is strengthening its military footprint along its eastern border immediately in response to Russia's aggression in Ukraine, the alliance's chief said Wednesday.
  • Russia Tests Obama's Ability To Stop Its Advances

    Russia Tests Obama's Ability To Stop Its Advances

    Tuesday, April 15 2014 11:26 AM EDT2014-04-15 15:26:29 GMT
    With the White House asserting that Russia is stoking instability in eastern Ukraine, President Barack Obama is once again faced with the complicated reality of following through on his tough warnings.
    With the White House asserting that Russia is stoking instability in eastern Ukraine, President Barack Obama is once again faced with the complicated reality of following through on his tough warnings.
Powered by WorldNow
Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices