Avoid the April 15th Tax Liability Surprise
Avoid the April 15th Tax Liability Surprise
Avoid the April 15th Tax Liability Surprise
No matter what time of year it is, tax planning services from a CPA are always relevant. Right now you and your CPA have the opportunity to be proactive with your taxes, such as calculating year-end bonuses, taking advantage of large depreciation expense laws signed in by congress, and reviewing tax credits and other deductions. However, you only have until December 31, 2014 to finalize most of your aggressive tax decisions.
Why is tax planning so important you might wonder?
- Every year Congress, in conjunction with the IRS, make significant tax changes that can materially affect you. If you do not plan for these changes, you might be unpleasantly surprised to find out your taxes are higher than expected.
- We are sure you are tired of being surprised with that phone call on April 15th from your CPA telling you how much you owe and unfortunately, you don’t have that amount put away.
Keep in mind these items when visiting your CPA for tax planning services.
The section 179 deduction for business assets placed in service has reverted back to $500,000 and 50% bonus depreciation for 2014.
There is some important decisions to make on the sale of your assets, such accelerating income recognition or deferring income to next year. Long-term capital gain and qualified dividend rates for 2014 are 0% for individuals in the 10% – 15% tax bracket, 15% for individuals in the 25% – 35% tax bracket, and 20% for individuals in the 39.6% tax bracket. There is also an additional 3.8% Medicare Contribution Tax on investment income derived from interest, dividend, royalties, rents and gains not generated in an active trade or business for individuals with a modified adjusted gross income in excess of $200,000 for single filers and $250,000 for joint filers.
Additionally, for those who may extend their tax filings, even if the year is closed, tax planning before April 15th still has a lot of value such as retirement planning and calculating your tax liability.
Lastly, when your business is holding a lot of cash and you are paying too much in taxes, our CPAs can assist you with more advanced planning such as 831B plans, retirement planning, non-qualified retirement plans, health contributions, and other areas.
If you have any questions regarding these, or any other tax inquiries, please contact our offices today.
by Geoffrey N. Geever, CPA, Managing Partner of Unique Accounting-Colorado
