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Although Halloween has yet to come and go, and Christmas is still far down the road (at least we like to pretend), we here at Global View have begun the arduous process of closing the books on 2013. Time is clicking away for you as well to finish up your fiscal year, so here are a few items we recommend you revisit as 2013 draws near its conclusion.
Capital gains
If you have a legacy stock you have owned for a long time that has done well recently, now is may be an excellent time to take that gain.
Charitable contributions
Charitable contributions are a great way to reduce your tax liability and continue the mission of worthy organizations through your gifts.
You have until December 31 to make charitable contributions and get the tax deduction for 2013. However, if you plan on making gifts with shares of common stock or a mutual fund it should be processed by December 13 to allow for enough time for the transfer process. Real estate is another great asset to use in gifting to charities. This will take time and careful planning.
Retirement plan contributions
You have until December 31 to make additional contributions to your employer’s 401k or 403b retirement plan.
401(k) & 403(b) -This may also depend how your retirement plan is structured. The Salary deferral limits for a 401(k) for 2013 is $17,500, plus an extra $5,500 if you are 50 or older. SIMPLE 401(k) contribution limit is $12,000 or $14,500 if you are 50 or older. Please consult your tax advisor for details on the SEP IRA contribution limits.
Roth IRA and Traditional IRA contributions
IRA contributions can be made until April 15, 2014. The limit for 2013 is $5,500, with an additional catch-up contribution of $1,000 for people age 50 or older.
Business planning
It is important that you continue to consult with your accountant or tax advisor to address the many tax law changes that will likely occur over the next several years. These may have a tremendous impact on your business and planning for the future.
Education Planning
Section 529 College Education Savings Plan – “Frontloading” is an exception to the Gift Tax limitation. Within one year of opening the account, you may contribute for the first five years all at once, up to $70,000 or ($140,000 for couples), as long as you don’t contribute any more for the first five years following the account opening. This is great for those with lump sums, such as inheritances, and it allows more money in the account sooner, giving it more time for potential growth. Specific states may have state income tax benefits when using their state sponsored plan.
The deadline for making contributions is April 15, 2014.
Estate Planning
The year end is a great time to review your estate plan. This would include who you have listed as your Personal Representative, trustees of any trust, guardian for your minor children, agents for your durable power of attorney and healthcare powers of attorney. Also, review beneficiaries of your will, trust, life insurance and retirement account beneficiaries.
In closing, I would recommend that you consult with your tax advisor for specifics to your situation.