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Watch Out for Telephone Tax Scams This Year

April 18, 2018

Filed under: Taxes — Neel Shah @ 9:15 am

The elderly are exposed to all different types of possible financial fraud, and unfortunately, tax scams are on the rise. Telephone tax scams have become extremely prominent in recent years and despite the fact that there have been featured in the news media and warnings from the federal government, it is tempting to want to deal with these tax situations sooner rather than later. Chances are though, however, that the IRS is not calling you directly. 

Some of the most common forms of these telephone tax scams right now, tell a person that they are going to be prosecuted if they do not make a payment immediately. Tax scams ate always on the rise nearing tax season, particularly any phone calls that threaten criminal prosecution, lawsuits or police arrest.

The IRS says to avoid giving any personally identifying information over the phone. More than likely when the IRS reaches out to a person who has a tax issue, this will be done in writing and will come on official IRS letterhead. Over the phone, people may threaten you and try to encourage you to give personal identifying details, such as your bank account, to make a payment. But this is not the IRS. Many of these criminals impersonate IRS agents and promise you a big refund if you give them private information.

According to the Treasury Inspector General for Tax Administration, reports that were filed with that agency have led to more than $54 million in payments from victims to these phone scams. Being aware of these scams is one of the best ways to protect your assets from being decimated, now or in the future. If you have concerns about how to protect your assets appropriately, schedule a consultation with an experienced estate planning lawyer today.

What You Need to Know About Filing Taxes After a Loved One’s Death?

March 26, 2018

Filed under: Taxes — Neel Shah @ 9:15 am

Many clients who are suddenly facing the prospect of losing a loved one find themselves in over their head and extremely confused about the next steps they need to take. There may be nothing certain about life except death and taxes, but filing and paying taxes after a loved one has died can seem like a lot to do. get help doing taxes with a loved one's estate

The final return must be done whether it falls to an executor or the heirs. If an individual passes away during the year and he or she received income, then a tax return is needed.

If your spouse passes away during the year, you can file married, file in jointly or married filed separately, whichever of these gives you the preferred tax treatment of your income. Sometimes you must carry out different tax calculations in order to determine this.

Money that is received from IRAs, life insurance annuities or other pensions may have tax implications that need to be handled and appropriate tax planning is essential. Funds are received, taxes become due and it can become a serious problem if no planning was done to cushion the shock of the tax bill.

When dealing with a multitude of issues after losing a loved one, getting financial assistance may seem like just one more step. However, a few minutes with a professional can be a stress reliever and can give you a clear course of action. It is especially important to consider the financial tax return implications when business partners are involved. Even if the partners are spouses, there are numerous considerations that need to be carefully calculated and taxes filed for the business that may include a final business return. Business taxes are extremely complicated and require the insight of a professional.

Top Questions to Ask Your Estate Planning Attorney After the Passage of The New Tax Law

January 25, 2018

Filed under: Taxes — Neel Shah @ 9:15 am

 

Now that the new tax law has come into place, plenty of people are thinking about what they need to do in order to protect themselves and their future. This often warrants a conversation with your estate planning lawyer, who can tell you more about what you need to know. An estate plan often needs to be updated based on your individual circumstances as well as shifts in state and federal laws. The aggressive tax reform that was recently passed should prompt you to schedule a consultation directly with an attorney. Ensuring that your plan is up to date can make things much easier for your loved ones in the future. The following questions should be considered by anyone who believes that an update to their estate plan may be in order. get help with 2018 tax laws by hiring a NJ estate planning lawyer

Even if you are not yet sure whether you need to revise your strategies or existing documents, a lawyer can help point you in the right direction and give you greater peace of mind about the future. These top questions include:

  • Will my estate tax picture be impacted by the new federal law?
  • How does my marriage or divorce get affected by the exemption limit?
  • Do I have to worry about any state estate taxes because of a property I own in other locations?
  • Are my estate documents customized to avoid unintended consequences and carry out my individual wishes?
  • How soon should I schedule another review of my estate plan?

 

Top Concerns for High Net Worth Clients in Light of New Tax Changes

January 17, 2018

Filed under: Taxes — Neel Shah @ 9:15 am

Many people are taking the opportunity to look at their current estate plans and tax plans in light of new tax laws in the U.S. While everyone can benefit from a regular review of their estate planning tools, high net worth clients have the most to gain from setting up a time to talk about estate planning and asset protection planning.

There are a number of different tax implications for wealthy families currently facing the restructuring of their estate and tax plans. Trusts can provide valuable protection from divorcing spouses and creditors and also enhance the control of an individual over how a beneficiary inherits wealth. 

This is particularly important for families that have addiction, mental illness, or spendthrift considerations. Furthermore, trusts can be used to help preserve wealth for numerous generations.

Since numerous different states will have their own estate tax regimes and you may own property in multiple states at the same time, anyone who owns property or resides in those states should continue to plan around these state level taxes.

For very high net worth clients who still have exposure to the federal estate tax or live and own property in states with their own estate tax, traditional wealth transfer strategies identified by an experienced estate planning lawyer can be helpful.

                                                                                                                

The New Tax Laws and Property Taxes In New Jersey

January 16, 2018

Filed under: Taxes — Neel Shah @ 9:15 am

Are you getting ready to file your tax returns in New Jersey? Many people who rushed to pay their 2018 property taxes before December 1st will not be able to deduct this expense from their 2017 state income taxes, according to research from the New Jersey Society of CPAs. The IRS recently issued instructions that certain 2018 pre-payments were deductible from federal income taxes in 2017. plan for taxes and estates with a lawyer

While this is true at the federal level, the same is not true for state income taxes. Homeowners may be in for an unfortunate surprise when they realize that their attempts at end of year planning to increase their federal property tax deduction will have no impact on their exact 2017 New Jersey income tax returns.

Setting aside a time to talk to an experienced estate planning attorney in New Jersey can give you a great deal of peace of mind and clear planning strategies for your best interests. You need to look to the year ahead and ensure that you’re using strategies that both work for you as well as truly protect your interests.

It can be a minefield to try and decipher tax laws on your own. Thankfully, however, with the help of a lawyer this process can be made that much easier. Sitting down with an attorney and walking through your current strategies to identify whether or not they will still work for you is a valuable exercise and one you should consider carefully.

Estate Planning- A Good Idea Even If the Death Tax Ultimately Disappears

November 6, 2017

Filed under: Taxes — Neel Shah @ 9:15 am

Are you currently following all the news about potential tax updates? If so, you’re not alone. Many people are expressing their concerns about whether or not tax issues will affect them if a major reform comes into play. estate tax reform

Congressional Republicans and the White House have proposed a new tax reform plan that eliminates the Federal Estate Tax. However, while this would make it easier for some people to simplify their estate planning, avoiding complex strategies to produce a potential tax bill, this doesn’t mean that you should necessarily ignore estate planning overall. First of all, you want to ensure that your assets go to where they are needed the most.

The more complicated your family situation, the greater the need for a comprehensive estate plan. Remember that some states will still have state-level estate taxes. The majority of states do not have an estate tax, but six states have inheritance taxes that apply to the recipients of gifts and 14 states in addition to the District of Columbia have state level estate taxes. The exemption amounts are often much lower than the federal exemption of $5.49 million.

The need for federal tax planning in and of itself will also not go away and you should never skimp on estate planning because there are many different goals that you can still accomplish with this process and benefit from the insight of an attorney, who can help you to identify strategies to pass along your accumulated assets to your loved ones. Scheduling a consultation with an experienced estate planning attorney today is strongly recommended.

 

It Makes Sense to Do Your Year-End Tax Planning Now

October 24, 2017

Filed under: Taxes — Neel Shah @ 9:15 am

 

It might seem like you’re still just beginning the fourth quarter but it is still a good opportunity to consider your 2017 tax return. Wanting to get ahead over the fall can make things easier for you after the busy holidays. You may even be able to make your New Year a happier one with a reduced tax burden or a larger refund. plan for taxes and estates with a lawyer

Looking ahead to 2018, businesses and individuals need to be aware of the potential for late tax legislation and prepare for any of the responsibilities and requirements that could come with tax reform being a major priority for the current presidential administration. Tax planning opportunity should always be discussed with your team of advisors including your financial professional and your estate planning lawyer. Delaying income till 2018 and accelerating your deductions this year is one of the best ways to minimize your 2017 tax bill. This is particularly true if tax reform causes tax rates to go down in the next year.

Accelerating your deductions into 2017 and pushing income into 2018 could lead to a permanent tax benefit if the tax rates are indeed lowered.

You may also be able to request, for example, getting your year-end bonus later if it is standard practice at your company. If you are a freelance employee, you could also postpone billing. By doing so you may be able to claim larger credits, deductions and tax breaks for 2017 that are phased out over varying levels of adjusted gross income. This could include higher education tax credits, deductions for student loans interest and child tax credits. Some individuals may find that it is better to accelerate income into 2017 and this should be discussed directly with your financial professional.

Could Partnership Income Tax Rules Help You with Estate Planning?

May 30, 2017

Filed under: Taxes — Neel Shah @ 9:15 am

It’s no surprise to anyone who has engaged in the estate planning process already that there are plenty of strategies out there to help you accomplish your planning goals while also passing on as much wealth to the next generation as possible. Many of these tools, though, could still be subject to generation-skipping taxes or other measures Congress has put in place. One novel strategy that could help minimize taxes is by granting a family member partnership interests in a family business.

The most common way to think about estate planning without using this tool involves reducing the values of assets that will be included in an estate in order to pass on the future appreciation to the next generation taking control of that asset. This is usually done with tools like intentionally defective grantor trusts, grantor retained annuity trusts, or qualified personal residence trusts. While all of these certainly have their place, each does come with some disadvantages that could compromise your ability to accomplish estate planning goals.

advanced tax planning strategies lawyer

Partnership income tax law provisions, however, could be the solution you’ve been searching for. A family business already taxed as a partnership, for example, could help accomplish estate planning goals successfully. You can reallocate portions of income and use transfer of appreciation or current value without having to tap into any lifetime or annual exclusions. Even better, this can help you avoid the negative implications of a generation-skipping transfer tax. There are a lot of complex strategies that can help high net worth families, but these should always be evaluated carefully by an experienced estate planning lawyer due to their complexity. All of the details really matter when it comes to strategies like this.

When looking for estate planning solutions, it’s good to have an eye towards strategies that help you accomplish multiple goals at once. The right estate planning lawyer can play a critical role in helping you identify these.

 

 

 

 

What Trump’s Election Means for Wealth and Tax Planning

November 10, 2016

Filed under: Taxes — Neel Shah @ 9:15 am

Now that Trump has been elected, it’s time to look forward to see what potential implications this has from a wealth and tax planning perspective. Of course, this is all dependent on the direction things go in January when he takes office, but there’s agreement across a typically-divided Washington that the tax code needs major reform. With the support from both sides of the aisle and a Republican Congress, there’s a good chance that bipartisan tax legislation will be on the agenda in the first 100 days of a Trump presidency. NJ tax attorney

The main gist of the tax plan is to reform the code by dropping income tax rates for businesses and individuals and raising the standard deductions. Personal exemptions would be repealed and itemized deductions limited. Furthermore, Trump has shared his desire to repeal the federal estate tax. However, the least is known about how a repealed estate tax would actually get through.

It’s not just individual income taxes that are going to take a hit, either. The corporate tax rate may be dropped from 35 percent to 15 percent. The majority of corporate tax expenditures will be eliminated except for research and development credits, and Trump also supports a one-time 10 percent tax for those who keep corporate profits offshore.

No matter what the changes end up being, it’s clear that the winds of change are blowing. Everyone, whether it’s an individual planning ahead for their estate or a business owner concerned about long-term tax planning and asset protection, should be prepared for considering new strategies in the near future. Partnering with a law firm where the attorneys have extensive experience interpreting these complex issues and translating them into strategies for individuals will be more important now than ever.

 

 

IRS Takes Aim at Estate Tax and Gift Tax Discounts on Entities

August 16, 2016

Filed under: Taxes — Neel Shah @ 9:15 am

At the beginning of August, the Treasury Department issued proposed regulations under section 2704(b) of the Internal Revenue Code and a hearing has been scheduled for December 1st, 2016. These new regulations, while still in the proposal period, would take away all valuation discounts for inter family entity transfers that are controlled by the transferor or his or her family. irs

While these regulations might not take effect until sometime in the following year, it could be necessary to complete any discount related planning over the next several months. Some of the biggest changes adopted in the proposed regulations are outlined below. These regulations give a broad definition of control. For example, control is classified as holding 50% or more of equity in a company based as an LLC partnership or corporation. For limited partnerships, control is equivalent to having an interest in the LLC’s general partner. The proposed regulations would change valuations for transfer tax purposes of interests in family owned entities that are subject to restrictions on redemptions or liquidations.

Specifically, these restrictions will be disregarded in terms of valuing such interests for estate tax or gift tax purposes when the interest is transferred by a family member. The reasoning behind this is that after such a transfer the restriction would lapse or could be removed by the transferor or a member of his or her family. These would have a significant impact on wealth transfer tax valuation for family controlled entity interest. Practically no minority discounts would be allowed. In order to learn more about this process, you need to consult with a New Jersey estate planning and asset protection planning attorney. A knowledgeable attorney can help you protect your interests- reach out to our office today by contacting info@lawesq.net.

Comparing What You Need to Know About the Presidential Tax Reform Proposals in 2016

July 28, 2016

Filed under: Taxes — Neel Shah @ 9:15 am

It’s expected that tax policy will be one of the biggest issues in the 2016 presidential campaign. To understand how various presidential candidates, view this issue, read on to learn more.tax forms

  • Estate tax. The Hillary Clinton plan propose increasing the highest estate tax rate to 45% and lowering the estate tax exclusion to $3.5 million. Donald Trump eliminates the estate tax entirely. Bernie Sanders would propose increasing the top estate tax rate to 65% and lowering the estate tax exclusion to $3.5 million.
  • Income tax: Rates on ordinary income. Hillary Clinton wants to add a 4% tax on income over $5 million. Donald Trump establishes four tax brackets with rates of 0%, 10%, 20% and 25%. The top rate applies to income over $150,000 for single filers and $300,000 for joint filers. Bernie Sanders, likewise establishes four new brackets but these are 37%, 43%, 48% and 52%. The top rate applies to taxable income over and above $10 million. All other tax brackets would be raised by 2.2%.

Although it’s impossible to predict just yet how these income and estate tax proposals could influence you, and whether they would be successful, you need to work with a knowledgeable attorney who can help guide you regardless of the changes made. Attorneys who are familiar with the changes made legislatively and at the turn of every new presidential administration can help explain to you how this would trickle down to you and what you can do to prepare for it in advance.

Do not hesitate to reach out to a New Jersey estate planning attorney to learn more.

Should You Be Concerned About the New Nevada Commerce Tax?

July 18, 2016

Filed under: Taxes — Neel Shah @ 9:15 am

Nevada has recently instituted a new tax referred to as the commerce tax. This tax is calculated on any gross receipts higher than $4 million at a rate classified by your NAIC code from the fiscal period of July 1st to June 30th of every year. 2016 is the first year for this tax return change, but this tax return is due even if you do not presently have gross receipts higher than $4 million. You may be responsible for completing a return, but you can contact our office to learn more about this obligation.  tax planning help NJ

You need to have these returns prepared and sent in by August 15th, 2016. Although you may have just received your welcome letter from the state in order to register your business entity to submit this tax return online, bear in mind that the state of Nevada will not be providing you with tax returns directly. If you, for some reason, do not receive the welcome letter from the state of Nevada, you need to visit the state’s website in order to ensure that you have the appropriate Nevada business license. You are still responsible for completing the tax return if you meet the qualifications, whether or not you actually receive the letter.

This tax return applies to any entities with a business license including rental properties on an IRS schedule E. On the first page of the tax return, there is a checkbox indicating that you have gross receipts in excess of $4 million. In the event that your gross receipts do total more than $4 million, you may be eligible to take advantage of adjustments to lower your taxable amount, but you need to speak to your attorney as soon as possible. Since time is of the essence, reach out to our offices today to learn more how we can help you.

                                                                                                                            

 

What Is The Scariest Tax Form?

February 17, 2016

Filed under: Taxes — Neel Shah @ 9:15 am

 

Tax lawyers and accountants spend the majority of their time focusing on exposure and you should as well. This means sometimes watching the calendar and clock until you are cleared of auditing exposure. The IRS typically will have three years to audit you. If you make a mistake with your offshore account reporting, however, the IRS gets six. There are other situations where they may get more.shutterstock_158874281

Many people may find it surprising that if you have a company holding a foreign account the issue becomes even more sensitive. These refer to controlled foreign corporations frequently referred to as CFCs. When a shareholder in the United States holds more than 50% of the value or votes in a foreign corporation the company is considered a controlled foreign operation. This triggers reporting requirements with the IRS, specifically the IRS Form 5471. This is a vital form.

If you fail to file it, you could be facing penalties of up to $10,000 per form and a separate penalty can be applied to each form filed late, and each incomplete or inaccurate return too. This penalty applies even if there is no taxes due on the return. The override of the normal statute of limitations for IRS auditing in this particular form is broad. The IRS in fact has an indefinite period to examine as well as assess any taxes associated with items on the missing form. The IRS can make adjustments to the entire tax return with no date of expiration until the form is filed. You need to ensure that any time you have a situation like this that you have filed the form appropriately.

A Shift in Tax Focus for Estate Planning

January 1, 2016

Filed under: Taxes — Neel Shah @ 9:15 am

A shift has taken place in estate planning from saving on a state tax to avoiding capital gains taxes. With the federal estate tax exemption having been established at $5 million and now increase to $5.43 million per individual, it means that with portability, many spouses now are looking at a tax threshold of nearly $11 million and need not greatly worry. Only 0.12% of estates are likely to be taxed. shutterstock_94126492

This doesn’t mean that you should avoid important planning opportunities however, as you can benefit from thinking ahead and putting in place various strategies and tools to help maximize what you leave behind to your heirs.

The shift in estate planning is now going from transferring assets during lifetime to doing so at death and this helps to erase capital gains taxes. Distribution from a trust can allow beneficiaries to pay income taxes on individual lower bracket rates.              

Estate Tax Repeal Bill Likely Headed for a Vote

April 2, 2015

Filed under: Taxes — Neel Shah @ 9:15 am

In early March, Representatives Kevin Brady and Sanford Bishop introduced an estate tax repeal bill currently known as HR 1105. Although this isn’t the first estate tax repeal bill to appear as possible legislation, it’s quite likely to head to the House floor for a vote. It would be the first estate tax repeal bill in the last decade to make it that far. Changes on Pocket Watch Face. Time Concept.

While the specifics of the text inside are not released yet, it’s anticipated that it would suggest amending the Internal Revenue Code to repeal generation-skipping transfer and estate transfer taxes. It’s also expected that a maximum 35 percent gift tax rate would become permanent alongside a $5 million lifetime gift tax exemption.

Repealing the estate tax does have traction in the public, especially because it’s perceived to be so harmful to American businesses and farms considered the backbone of the economy. Combined with the fact that the estate tax brings in under 1 percent of the government’s revenue, the Representatives who introduced the bill believe that it’s time for changes with the estate tax. The bipartisan legislation has already moved though subcommittee hearings, a Senate introduction of the bill, and the vote on the House floor.

To learn more about possible changes in the estate planning sphere, contact us to set up a meeting for review of your plans. Reach out to us at info@lawesq.net.

Gift Tax Returns and Penalties for Not Filing

March 23, 2015

Filed under: Taxes — Tags: — Neel Shah @ 9:15 am

A fair amount of taxpayers are familiar with at least the basics behind gifts and taxes, but it’s important to understand your obligations when making taxable gifts to others to ensure your compliance with the Internal Revenue Code.

If you make a taxable gift to someone else, a gift tax return needs to be filed. If you fail to do this, penalties may apply. If you don’t file the gift tax return as you should, you could be responsible for the amount of gift tax due as well as 5% of the amount of that gift for every month that the return is past due. If you fail to pay the penalty, you could be responsible for the amount of the gift tax due and .5% of the amount of the gift for every month after the due date. shutterstock_163036214

Sending in your gift tax return is important for practitioners, too. Failing to do this could result in criminal charges or even referral to the IRS Office of Professional Responsibility under the umbrella of a Circular 230 violation. Bear in mind that although this filing requirement does relate to taxable gifts, even those under the annual exclusion amount, should be listed on a report. Those who fall under the annual exclusion, however, are unlikely to face a penalty as these penalties only relate to the amount of tax due.

If you’ve got more questions about your obligations for reporting with regard to gifts, contact our office to learn more about the process and how gifting can impact your overall tax situation. You can set up a meeting by emailing info@lawesq.net.

New After-Tax Rollover Rules For Your 401(k)

September 26, 2014

Filed under: Retirement Planning,Taxes — Tags: — Neel Shah @ 8:47 pm

New rules for your 401(k) could actually end up benefitting you. If you have saved after tax money in your 401(k) retirement account, it can be rolled over to a Roth IRA. While in the Roth IRA, your money will grow on a tax free basis instead of a tax deferred basis. You’ll avoid having to pay pro rata taxes on your distribution, too.

Photo Credit: visionarywealthmgmt.com

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This new change creates an opportunity for planning. Prior to this new rule, advisors had to use complex planning tools to address client concerns. Taxpayers were required to roll over their entire 401(k) and use outside funds at the time to manage the 20% income tax withholding amount. The new rule, however, gives people without the cash on hand to replace dollars that were already withheld through a distribution.

In order to capitalize on this new rule, it’s important to understand that the distributions must be scheduled at the same time or they will be treated as separate, causing the mix of pre-tax and post-tax dollars. While the official rules begin on January 1, 2015, taxpayers can make use of them now since the rules were issued on September 18, 2014. In the past the IRS has allowed taxpayer relief based on a “reasonable interpretation” standard.

To learn more about the best strategies for your 401(k) and other retirement accounts, contact our offices for a personalized consultation. Request an appointment via email at info@lawesq.net or over the phone 732-521-9455.

When to Think About Charitable Remainder Unitrust Alternatives

July 18, 2014

Filed under: Charitable Giving,Income Tax Planning,Taxes,Trusts — Tags: , , , — Neel Shah @ 4:40 pm

For many individuals approaching estate planning, charitable giving is going to factor into the equation somehow. The most popular way of passing on assets currently is through a charitable remainder unitrust, but it’s not necessarily the best option for everyone, although last year nearly $90 billion was held in U.S. trusts of this type.

When to Think About Charitable Remainder Unitrust Alternatives
(Photo Credit: lifehealthpro.com)

Here are some of the most common reasons that you might want to use something other than this trust vehicle for your charitable giving:

  • Tax Savings Today: You want maximize your current tax deduction. A charitable lead trust could be a better alternative for this situation, since you get an immediate federal income tax deduction when the gift is made. The tax deduction equals the present value of the future income stream.
  • You want the gift to begin now: Under a charitable lead trust, the client will typically gift the assets directly to a charitable trust. That trust then makes regular payments for a specific number of years or for life. Under a remainder trust, though, the charity doesn’t get anything until the trust’s term is up.
  • You want to see regular payouts: This is there’s a difference between a charitable remainder annuity trust and a unitrust. The annuity trust guarantees equal payouts throughout the length of the term (such as every year), which gives the person setting up the trust confidence that payments are being made at regular intervals.

When it comes to charitable giving, you have options. Contact us today to learn more via email info@lawesq.net or 732-521-9455 to get started.

Saving Taxes: Is a DING Trust Right For Me?

July 15, 2014

Filed under: Income Tax Planning,Taxes — Tags: , , — Neel Shah @ 4:25 pm

Like a lot of business planning strategies, it’s best that you meet with a legal professional to discuss the best tactics for your situation. One of those strategies might be a DING (Delaware Incomplete Non-Grantor Trust), a tool that is growing in popularity for managing and minimizing both federal and state income taxes. Especially for those individuals living in states with high income taxes, a DING trust is a powerful strategy for making the most of your assets without being so negatively impacted by taxes.

Saving Taxes Is a DING Trust Right For Me
(Photo Credit: america.schickhappens.net)

In a DING trust, a person can transfer assets (including some business interests) that produce a high level of income into a trust without triggering a state or federal gift tax. The state income taxes are actually transferred from the resident’s home state to a state where trust income is not taxed. There are several jurisdictions that have been used in the past for this purpose include Nevada, Delaware, and Alaska.

This type of trust is a great choice for someone who has significant portfolios that generate income or those individuals that live in a high tax state concerned about the tax implications of their assets. This form of asset protection gives peace of mind and confidence to those who use it. As of right now, New Jersey does not tax trust income if there are no resident trustees. Therefore, assets held in a DING trust may be exempted from high state income taxes (8.975% in New Jersey). For special tax planning, contact us for more details at info@lawesq.net or over the phone at 732-521-9455 to get started.

Mid-Year Tax Planning Tips

June 20, 2014

Filed under: Income Tax Planning,Retirement Planning,Taxes — Tags: , , — Neel Shah @ 3:57 pm

While not much has come out in the first half of 2014 with regard to tax legislation, there are still some important tax planning opportunities to tap into. Mid-year is a great time to schedule in your financial and estate planning review to double-check that nothing has changed and to verify that you don’t need any additional components in your plan.

Mid-Year Tax Planning Tips
(Photo Credit: w2taxservices.com)

Income tax planning usually involves a mix of three separate strategies: earning income that is received with favorable tax rates, like that which comes from qualified dividends or long-term capital gains, delaying the payment of tax by deferring income receipt to another year, and avoiding income bubbles that bump you up to another tax rate.

One way to reduce your tax obligations and contribute to your future is to ensure that you’re putting money (and enough of it) into a tax-qualified retirement plan. Doing so means that you are deferring taxes on earnings until you actually take the distributions out.

Finally, a great mid-year step to take is to verify that you are keeping good records. While most people make this promise to themselves after a hectic tax season in April, they tend to forget about it until tax time rolls around again next year. Instead, make sure you’ve kept track of your charitable deductions to date, any extra income, and other tax-related details. It’s also a great time to set up a meeting with your planner to discuss more options, especially if you have other goals you’d like to meet. To schedule your mid-year review, call us at 732-521-9455 or send an email requesting an appointment to info@lawesq.net.

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