Manendra Kothari is qualified Chartered Accountant from India and qualified and licensed CPA from US. He has 15+ years of total accounting and tax experience working on board of large and small public accounting firms. Visit us : http://schaumburgcpa.info

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The best tax planning decisions are
made with the benefit of time,
thoughtful consideration, and trusted
professional advice. As tax time
approaches, now is the time to organize
and prepare for sound long-term
financial decisions and minimize
expenses, and taxes.

2. In preparing for this year's tax filing, begin to organize tax records
including year-end investment statements, capital gains and losses
from asset sales, transaction records from real estate transactions,
interest and dividend records for the year (1099s), payroll and
withholding statements (W-2s), records corresponding with
deductible expenses such as property taxes and insurance, business
income and expense records, etc. Some of these will not come until
January or February of the following year.
Organize Your Tax Records EarlyOrganize Your Tax Records Early

3. Consider timing of controllable income and deductions to take
advantage of any irregular income swings. Defer income until
2015 and accelerate deductions for 2014. Deferring income is
also favorable for those taxpayers who anticipate being in a
lower tax bracket next year. It must be noted, however, that in
some cases, it may be beneficial to accelerate income into
2014. This may be the case for a taxpayer whose marginal tax
rate is much lower this year than it will be next year. Even
consider requesting your employer to hold on to your bonus
check.
Consider if you should accelerate or defer
income or expenses
Consider if you should accelerate or defer
income or expenses

4. Determine whether you are likely to be subject to the
Alternative Minimum Tax (AMT) and if those actions could
trigger this tax. Many deductions used to calculate regular tax
are disallowed for AMT purposes, some of which include the
deductions for state income taxes, real estate taxes,
miscellaneous itemized deductions, and personal exemption
deductions. Do not accelerate these deductions when you are,
or suspect you might be, subject to the AMT.
Determine if you will be hit by AMTDetermine if you will be hit by AMT

5. Take losses on stocks and mutual funds in order to offset any
taxable gains realized during the year. However, annual
deductible capital losses are limited to $3,000 in excess of
your gains.
Consider selling selected stockConsider selling selected stock

6. If you plan to make charitable donations, consider donating
appreciated capital gain assets (e.g., stocks) rather than cash.
By doing so, you avoid the capital gain tax and 3.8% net
investment income tax.
Consider donating appreciated stockConsider donating appreciated stock

7. Estimate your tax liability ahead of time and if you are likely to
owe some tax, consider making estimated tax payment now
rather waiting till time to file your return to avoid or reduce
estimated taxes. Consider paying your fourth-quarter
estimated state income tax payment as well as your real
estate property taxes in December 2014, unless you are likely
to be subject to AMT
Calculate and pay required estimated taxCalculate and pay required estimated tax

8. It may be beneficial to group your miscellaneous itemized
deductions in the current year or next year. These deductions
are allowed only to the extent that they exceed 2% of adjusted
gross income (AGI), as well as medical expenses, which are
taken only in excess of 10% of your AGI.
Group your miscellaneous deductionsGroup your miscellaneous deductions

9. Maximize your contributions to Retirement and 401(k) plans. When you have a
business, contributions to a plan reduce your taxable income. If you currently have a
traditional IRA, you may benefit from converting to a Roth IRA, which will allow you to
transform a tax-deferred future growth into tax-free growth. You will pay taxes on the
IRA asset value converted to a Roth. Be aware that you may pay taxes on the rollover
and the income from the conversion will raise your AGI and may trigger NIIT, additional
Medicare tax, or itemized deduction phase-outs.
If you have already converted assets from a traditional IRA to a Roth IRA earlier this
year and the assets in the Roth IRA account declined in value, you will end up paying
higher taxes than needed. In this case, you can choose to reverse the transaction by
transferring the converted amount from the Roth IRA back to a traditional IRA using a
trustee-to-trustee transfer. You can then choose to re-convert the IRA to a Roth IRA at
the current, lower market value.
Using retirement plan options to save taxesUsing retirement plan options to save taxes

10. If you are eligible to make contributions to your Health
Savings Account (HSA), you can still maximize your 2014
contribution before year-end so you will have a full year’s
worth of deductible HSA contributions.
Depending on what state you leave in and what education
plan you select, you may be eligible to get deduction or
contributing to an eligible sec. 529 plan. Similar to ROTH IRA,
funds will grow tax free as long as it is used for the
beneficiary’s higher education purpose.
Deadline for HSA and Sec 529 plan contribution is December 31Deadline for HSA and Sec 529 plan contribution is December 31

11. When you reach the age of 70½, you must take required
minimum distributions (RMDs) from your IRA, 401(k) plan,
and other qualified retirement plans. If you turned 70½ this
year, you should consider delaying the first required
distribution to 2015, and defer the income for one more year.
This will benefit many, but not all, people, depending on their
income situation in 2014 and 2015
Required Minimum Distributions (RMD)Required Minimum Distributions (RMD)

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