With an uncertain playing field, nimbleness is critical.
We’ve been here before. Tax “extenders” – various deductions and credits, typically affecting higher net worth individuals and business owners – are again up in the air as Congress decides whether or not to renew them. There are increasing whispers of wholesale tax reform, although it’s far from evident that Washington has the will to undertake it.
This year’s tax guide provides a high level blueprint for functioning in this climate of uncertainty and creating flexible plans that can put the tax laws to work for you.
As always, we provide this annual tax guide – created by a trusted third party provider – to give you some critical tax planning tools and information. Please let your AKM CPA know what piques your interest, and we’ll be glad to schedule a follow up conversation to discuss your personal situation and applicable strategies.
Year-to-date review [Page 2] – The review discusses the importance of timing income and deductions both to minimize your tax liability and to maximize your chances to avoid the Alternative Minimum Tax (AMT). It also discusses various strategies for taking deductions. Case study: Bunching medical expenses to save taxes.
Executive Compensation [Page 6] – This section reviews strategies for structuring executive compensation and how each one affects both the company’s tax liability and the executive’s. Case study: Saving taxes on restricted stock with a sec. 83(b) election.
Investing [Page 8] – In light of the new 3.8% NIIT (Net Investment Income Tax), planning is more important than ever if you have investment income. This article provides an overview of the rules, plus pitfalls and various proven strategies for avoiding them. Case studies How to qualify for the 0% capital gains rate; Tax-exempt or taxable bonds? It’s a question of yield.
Real Estate [Page 12] – This review provides some guidance for smart financial planning and tax savings in light of the uncertain recovery of the real estate market. Case study: Safe harbor offers home office relief.
Business ownership [Page 14] – Planning is critical if you own a business. This article covers retirement saving, exit planning, sale and acquisition.
Charitable giving [Page 16] – Higher income taxpayers can realize substantial tax savings through carefully planned and executed charitable giving. This articles surveys a range of strategies, from cash and stock donations to various trust structures. Case study: A CRT can reduce single-stock exposure risk.
Family and education [Page 18] – It’s never too early to start personal financial planning, and families can save significantly on their tax bills through IRAs for teenagers, education savings plans and strategic gifting.
Retirement [Page 20] – Having enough money to enjoy a comfortable retirement is a significant concern for many Americans. This article discusses how to get the most from your retirement plan contributions from both tax and retirement planning perspectives, as well as a survey of when it makes sense to take early withdrawals, what to do with your retirement fund when you leave a job and making sure you take the required minimum distributions after age 70 ½. Case study: To convert or not convert to a Roth IRA.
Estate planning [Page 22] – This article provides an overview of federal estate and gift taxes, along with some tips for tax smart giving. Case study: When “taxable” gifts save taxes.
Tax rates [Page 24] – 2015 individual income tax rate schedules.