Now that the 2012 tax season is over, it’s time to focus on tax planning for 2013. But with so much uncertainty concerning next year’s tax framework, this is a critical time to plan carefully and with expert help. Consult with a qualified tax professional. Here’s the checklist to save tax.
To do by year-end 2012
- Review the tax landscape for 2013; consult with a tax professional to determine your best tax moves for this year and next.
- Once there is greater clarity over what tax changes will occur in 2013 and how they may affect you, consider accelerating income or deferring deductions based on your most beneficial tax strategies.
- Consider converting a traditional IRA to a Roth IRA, which would result in owing taxes on the taxable amount you convert at this year’s potentially lower tax rates.
- Consider selling real estate or a business that has appreciated significantly in value this year, before higher tax rates are due to take effect.
To do at any time
- Conduct a thorough review of your personal finances and the potential impact of anticipated tax changes in 2013, such as higher long-term capital gains and qualified dividend tax rates beginning next year.
- Consider investing any available money in tax-deferred and tax-free vehicles, such as a Roth IRA, a traditional IRA, a 401(k), or a tax-favored college account, such as a 529 college plan.
- If you are unsure whether you are better off claiming standard or itemized deductions, consider alternating them the following year . Bunch deductible expenditures by accelerating or deferring certain expenses . This maximizes your deductions in the year that you itemize them.