As the end of the year approaches, your tax liability is beginning to solidify. As the ball drops in Times Square next week, most of your ability to plan for your 2014 bill goes out with the old year.
- Consider your income and expenses for 2014 and 2015.
- Would you be better to defer some income or expenses into 2015?
- Would you be better to accelerate some income or expenses into 2014?
- Normally, it is better to defer income and accelerate expenses. However, each situation is different.
- Businesses have greater ability to do this than most individuals.
- Consider making a contribution to your retirement plan.
- The employee contribution to a 401k must be made by December 31st.
- The employer contribution may be made until April 15th of the following year.
- If you have an IRA, you have until April 15th to make a contribution for the prior year.
- If you have a Flexible Spending Account for child care, medical, or other designated expenses, you must use it by the end of the plan year.
- Of course, it is essential to track your expenses, both personal and business, for tax purposes and accounting purposes.
- The burden is on you to prove that you have a tax-deductible expense.
- If you’ve haven’t kept good records this year, make a New Year’s resolution to be better at record keeping in 2015.
- Estimated payments must be made quarterly for individuals with income exceeding their withholdings.
- The last quarterly estimated payment is due January 15th.
As today is Christmas Eve, Merry Christmas to all…and to all a good night! Ho, Ho, Ho!
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (800) 846-1555