5 Tips to Lower Your 2014 Taxes

As we approach the end of the year, it is a good time to review your current financial situation and utilize opportunities that may help you save money on your taxes. After December 31 this year, the number of tax-cutting opportunities decreases and many of the taxpayer-friendly provisions expired at the beginning of this year. Below are five tax-saving tips to help you reduce your tax liability for 2014:

  • Avoid a Tax Shortfall-Now is the time to check your withholding's and estimated tax payments while there is still time to make adjustments. Make adjustments as necessary to increase withholding's to avoid an underpayment penalty. 
  • Accelerate Deductions and Defer Income-Look at accelerating deductions, such as interest payments or real estate taxes, into the current year and deferring income, such as bonuses, into next year.
  • Leverage Your Retirement Account-Increase your contribution to a retirement account, such as a 401k or IRA. This helps reduce taxable income (at the time you contribute) and keeps you from paying taxes until you take the money out at retirement. 
  • Reassess a Roth IRA Rollover-As long as the transfer is done properly, this conversion allows you to pay taxes now in exchange for not paying taxes in the future. Depending on your situation, it may make sense to complete a conversion later and pay less tax.
  • Take Advantage of Your Gift Tax Exclusion-For 2014, you can give up to $14,000 to as many people as you wish free of gift or estate tax. If you combine gifts with a spouse, you can give up to $28,000 per beneficiary, per year.

Now is the time to be planning for your future, decreasing your tax liability and reviewing key documents, such as your estate plan, wills, powers of attorney and health care proxies for any changes.To schedule a consultation with one of our retirement planning advisors to review your portfolio and help you develop an IRA exit strategy, give our office a call (775) 853-9033, we’d be happy to help you.

Cornerstone Retirement Group