This is the promised follow-up to my 11/21 post about year-end tax planning in 2012.
As you may remember, I mentioned that this may be the year to go against the conventional tax planning strategy of deferring income into the following tax year and accelerating deductible expenditures. If you anticipate being in a higher tax bracket next year here are the next 3 of my "Sweet 16" list of tax strategies for 2012.
14. Clear "floor" for miscellaneous expenses. Miscellaneous itemized deductions must exceed 2% of a taxpayer's adjusted gross income before they are deductible on Schedule A. These expenses include, but are not limited to, unreimbursed employee business expenses and production-of-income expenditures. If you expect to be in a higher tax bracket in 2013 you may want to delay these expenses if you regularly exceed the 2%-of-AGI floor. Alternative minimum tax may be issue for some taxpayers.
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15. Move back your moving expenses. An employee can deduct job-related moving expenses in the year the expenses are paid. If one controls the timing of the move, the taxpayer may want to delay the move until January of 2013.
16. Study up on education tax breaks. Parents may be able to claim one of two tax credits for higher-education expenses paid or incurred in 2012. The tax benefits phase out for high-income taxpayers. The amount of the tax credit on one of the two tax credits will be decreasing in 2013 therefore you may want to pay tuition in 2012 versus 2013 if possible.
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Well, this is the last of the "Sweet 16". Please remember, that it is always advisable that before any tax decisions or transactions are considered, that one should consult with their CPA or tax advisor.
My next post will talk about ways to cope with the new Medicare surtax of 3.8% which will be imposed in 2013 as part of the "Patient Protection and Affordable Care Act"(PPACA), aka Obamacare. Keep watching!
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