Consider Your Taxes this Holiday Season

There is no better time than the holiday season to review any year-end tax planning decisions that could lead to savings in April. 

Taxpayers have had time to adjust to the tax rate changes from 2013, so when it comes to prudent tax planning for 2014 and beyond, accelerating deductions and deferring income will likely take center stage.

Here are a few things to consider:
•    The income tax rates for 2014 are the same as 2013, so most taxpayers with income similar to past years can expect their tax bill to be comparable to last year’s
•    Reviewing current income and withholding to ensure payments are on track can help you avoid surprises during the filing season.
•    If 2013 led to an unexpected payment being due, an increase to your withholding may help alleviate a cash crunch come April
•    Most employees can make an election to contribute additional amounts to their 401(k) to reduce the amount of their taxable income

Prudent tax planning in 2014 should involve a multi-year approach and consideration of expected changes to a taxpayer’s 2015 income and deduction picture.

For more expansive information and to read the entire article, please visit www.cpapracticeadvisor.com.