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Year End Tax Planning

Reprinted from PN December 2012

Whether or not you have a disability, these tips can help you get ready to discuss your tax situation.

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Whether or not you have a disability, the following information is designed to make organizing your year-end taxes a little easier. While it’s not intended to be comprehensive, it can help you get ready to discuss your tax situation with your financial advisor and tax professional. Consider these issues:

Income and Taxes

Check which types of income you had in 2012. Different categories carry different tax rates.

— Salary

— Interest

— Dividends


— Short-term investment gains

— Long-term investment gains

— Social Security

— IRA withdrawals

— Other income: ————————

Consider whether you:

— Need to rebalance your asset allocation to align with your investment objectives

— Have concentrated equity positions that should be addressed before capital-gain taxes increase

— Could use tax-loss harvesting to offset gains

— Could use tax-gain harvesting to minimize potential increases in 2013 capital-gains taxes

— Can control 2012 income and deductions

— Will be subject to taxes on distributions from investments

— Could be subject to the alternative minimum tax (AMT)

— Have fully funded education savings accounts

Retirement Planning

Think about whether you:

— Are making out your retirement plan contributions and catch-up provisions, if eligible

— Should convert to a Roth IRA in tax year 2012

— Are using municipal bonds for federally tax-exempt income

— Need to take required minimum distributions from retirement accounts

— Retired in 2012

Charitable Giving

Can you make charitable contributions in 2012 ahead of scheduled changes in allowable deductions?

Can you accelerate future years’ gifts into 2012 to capitalize on current tax-law changes?

Do you have highly appreciated assets that could be incorporated into your charitable-giving strategy?

Can you fund your children or grandchildren’s college education with a tax-deferred plan?

Small-Business Owners

Are you eligible for additional contributions to your retirement plan?

Can you control income and deductions?

Estate Planning

Ask yourself if you:

— Should review estate-planning objectives, particularly given scheduled tax-law changes

— Should gift assets to reduce future estate taxes, particularly ahead of proposed tax and exemption changes

— Can make gifts to children or grandchildren to reduce your estate and the possible impact of proposed changes

— Should review estate-plan documents and adopt flexible language, given legislative changes

Documents You May Need

-        Copies of your 2010 and 2011 income-tax returns

-         W-2 from your employer

-         Brokerage statements (1099-B) and any statements showing investment purchase/sale dates

-         Dividend and interest statements (1099-DIV, 1099-INT, and 1099-OID)

-         Social Security statement (1099-SSA) and/or retirement distributions (1099-R), if applicable

-         Statements reporting profits from partnerships, trusts and small businesses (K-1)

-         Mortgage interest statements (1098)

-         Student loan interest statements (1098-E)

You also should have receipts or proof of charitable gifts, moving expenses, medical/dental expenses, daycare/childcare costs, and education expenses.

Tax regulations are complex and ever-changing. Be sure to consult with your financial advisor and tax professional for advice on your individual situation.

Contact: Daniel C. Jones, dan.jones@raymondjames.com / 215-881-2712 / 887-3281 (fax) / 866-760-3544 / raymondjames.com/DanJones. 

 

 

 

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Year End Tax Planning

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