I hope your Independence weekend was glorious — whether you’re here in the Chino area, or outside. From the fireworks, to the extra-long weekend for many (even your trusty Chino tax business), this was a great little interregnum from “regular” life, wasn’t it?
Because after all, “regular” life has been a bit … momentous recently, hasn’t it? From the continuing broil in Egypt, to the tragedy at the Arizona fires and the San Francisco plane crash, to the recent Supreme Court ruling on DOMA, to last week’s announcement that the “employer mandate” for the ACA (“Obamacare”) was extended for another year … well, this hasn’t been a very slow July, has it?
But I sometimes find it useful to restrict my vision away from world events, in order to zero in on my Spencer family’s goals and activities — not always, of course, but it does sometimes remind me of what’s most important.
(Which reminds me: if any of the more recent events referenced above concern you in a specific way, please do not hesitate to email, and we can take a look at anything that might concern you.)
So, in that spirit, I’ve put together a few things that WOULD behoove you to look at, in terms of your family situation — here, at around the midpoint of 2013…
2013 Mid-Year Tax Moves For Chino Families
You know how good coaches are usually famous for making adjustments during the halftime of big games? Well, here I am, Michael Lin — acting as your financial coach in matters tax-related, and we’ve just about hit halftime for 2013.
We now have six months of financial info to use for some quick math about your year as a whole, and to prepare for a pleasant upcoming tax season.
To begin, all you have to do is take your cash flow for the first half of the year, and multiply by two. Add up your wages, dividends, interest, and any other income, and then–if this represents approximately what you’re expecting for the second half of the year–double the sum.
Once you have your estimated 2013 income, give us a call: 909-627-5927 (or send me an email), and we’ll help you determine the appropriate tax rate and deductions to apply. Because once you’re armed with this info, we can help you determine the amount of taxes you might expect to owe for 2013.
By then comparing this against your projected withholding, you can adjust the withholding on your paycheck in advance as needed, and ensure a happy visit to our office in the winter.
This can also be a good time to organize your financial records and/or get started with some financial software. Getting organized now can make gathering a report of all those deductions a breeze, come tax time.
2013 Tax Changes To Account For
You should also take into account the fact that income and estate taxes underwent seismic shifts in January, rearranging the landscape for many taxpayers. Wealthy Americans in particular are facing higher tax rates on ordinary and investment income.
That makes it all the more important to review Uncle Sam’s highest-impact tax breaks, such as donations of appreciated assets, tax-free exchanges and capital-loss harvesting.
Unlike obvious moves, such as contributing to an individual retirement account or a 401(k) plan, these strategies require a higher degree of awareness and active planning.
Not all high-impact breaks are for the wealthy. Any homeowner can benefit from a provision allowing taxpayers to pocket tax-free income from renting a residence for as long as two weeks, and low-bracket taxpayers can pay zero tax on long-term capital gains.
Other important moves can help minimize estate, gift and inheritance taxes. This might seem like a less-urgent task now, since Congress approved in January a generous gift-and-estate tax exemption of $5.25 million per individual that is indexed to inflation. But there already is a proposal to scale back the exemption to $3.5 million.
I hope all of this helps! Please don’t hesitate to contact me with questions.
PS–Don’t forget this!
Independence Month Special…
FREEDOM! (Enjoy Having Peace of Mind from the IRS)
$50.00 Towards Tax Planning Strategy Session with Michael Lin
Print this out and bring it to our office for a special strategy session for how you are using your income. We’ll identify the BEST ways for you to maximize your wealth for the current year, so that we won’t just be “cleaning up” after the fact. Time to give yourself a raise, through smart and careful planning!
Response Deadline: July 12th, 2013
Limit: First 5 respondents only (we’re limited by capacity)
Email or call us (909-627-5927) now!