Willis Report: Things to do right now to save on taxes next year - New York News

Willis Report: Things to do right now to save on taxes next year

Posted: Updated:
  • Arizona HeadlinesMore>>

  • County Attorney: Mesa police officer sexually assaulted detained women

    County Attorney: Mesa police officer sexually assaulted detained women

    A Maricopa County grand jury has indicted a Mesa Police officer on sexual abuse and child molestation charges.Officer Justin Cherry is a thirteen year veteran of the Mesa Police Department. Accusations of his misconduct surfaced in August of 2013.
    A Maricopa County grand jury has indicted a Mesa Police officer on sexual abuse and child molestation charges.Officer Justin Cherry is a thirteen year veteran of the Mesa Police Department. Accusations of his misconduct surfaced in August of 2013.
  • FOX 10 News Update

    Get a news update in 2 minutes

    Here is your news update for today, with some of our current top stories and your weather forecast!
    Here is your news update for today, with some of our current top stories and your weather forecast!

  • Who is the richest person in Arizona?

    Who is the richest person in Arizona?

    Ever wanted to know who is the richest person living in Arizona? In the country? The real-estate blog Movoto has released an interactive map that identifies the wealthiest person in the state and their net worth.
    Ever wanted to know who is the richest person living in Arizona? In the country? The real-estate blog Movoto has released an interactive map that identifies the wealthiest person in the state and their net worth.

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 on April 15 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 501(c)(3) organization so that you can take the deduction.

Interact with Gerri on Twitter @GerriWillisFBN and Facebook for more information, or to voice your concerns and questions.

Didn't find what
you were looking for?

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 | New Terms of Service What's new | Ad Choices