‘Tis the season to be jolly, but don’t forget about those last-minute tax strategies you can still take to reduce your 2014 tax liability. Let’s take a look at some of your options:
1. Make your January mortgage payment before December 31 to squeeze an extra interest deduction into 2014.
2. Review your investment portfolio to determine whether you’ll want to shift any investments before year-end to offset gains or losses taken earlier in 2014.
3. If a wedding or divorce is in your year-end plans, be aware that your marital status as of December 31 determines your tax status for the whole year.
Changing the dates of a year-end event may result in tax savings. Even though the tax law currently provides some relief from the marriage penalty, it does not completely eliminate it.4. Review the deductions you plan to take for 2014.
If you’re close to the cutoff point between itemizing and taking the standard deduction, consider the advantage of bunching your deductible expenses every other year. You can then alternate between itemizing one year and taking the standard deduction the next, saving tax dollars by doing so.5. If you are helping to support an elderly parent, your college-age child, or others, check the requirements that you must meet to take a dependency exemption for this year. You may need to make some year-end adjustments to qualify for taking the exemption.
Now you can kick up your heels, let it snow, and have a silent night because you can rest knowing you have taken steps to reduce your tax liability!
Marquita Miller is the founder and CEO of Five Star Tax and Business Solutions — a full-service accounting firm in Kansas City, Missouri. A small business expert contributor on CBS & FOX morning shows, Miller is a published author, business strategist, motivational speaker, and well-known entrepreneurship advocate. A recipient of Kansas City’s Influential Woman and Woman Who Means Business award, Miller is also a conference speaker and workshop facilitator for TD Jakes Ministries. www.marquitamiller.com. Twitter:@MarquitaMMiller www.facebook.com/MarquitaMMiller