During December, you should evaluate whether you’ll save any taxes by postponing 2013 income or deductions into 2014 or by accelerating 2014 income or deductions into 2013. While many factors should be evaluated prior to making your final decision, a few items to keep in mind are as follows:
- For 2013, a single person will itemize once allowable deductions exceed $6,100 and a married couple will itemize once allowable deductions exceed $12,200.
- A taxpayer is no longer subject to Social Security or self-employment taxes once wages and net self-employment earnings exceed and $113,700 in 2013 and $117,000 in 2014.
- Miscellaneous itemized deductions, such as unreimbursed employee business expenses, are only deductible to the extent they exceed 2% of adjusted gross income (AGI). Items paid with credit cards are deductible in the year charged.
- Medical and dental expenses are deductible to the extent they exceed 7.5% of AGI, and are deductible in the year paid.
If you need assistance in determining whether you should either postpone or accelerate your income or deductions, or whether you’ll be hit by the AMT, please give us a call.