Mid-year Tax Planning: Tips on Personal Income
We’ve reached the mid-year point and there is no better time than now to start your 2013 tax planning!
TIPS IN REGARDS TO INCOME
* Check your 2013 income tax withholding or 2013 estimated tax payments, particularly if you receive self-employment income. Make sure that your withholding and estimated tax payments equal at least 90% of your 2013 total tax or you will be charged with an underpayment penalty.
* Make sure you report ALL of your income.
* Reducing long-term capital gain income by selling capital loss investments to offset the capital gain is a tax-planning opportunity.
Other tax planning opportunities to reduce the new 3.8 percent tax include:
* Investing in tax-free municipal bonds
* Reducing investment income subject to tax with investment expenses and account maintenance fees
* Avoiding the tax with qualified plan contributions
* Deferring the tax with installment sales and like-kind exchanges
* Grouping passive partnership profit-and-loss investments to minimized overall passive income subject to the tax
Davis & Hodgdon Associates has been assisting businesses and individuals in the Burlington Vermont Metro area for more than 20 years. If you have any questions or concerns please feel free to call 802.878.1963 or email [email protected].