Accelerating deductions to save taxes

November 18, 2014

Accelerating deductions to save taxes

Smart timing of deductible expenses can reduce your tax liability, and poor timing can unnecessarily increase it. When you don’t expect to be subject to the alternative minimum tax (AMT) in the current year, accelerating deductible expenses into the current year typically is a good idea. Why? Because it will defer tax, which usually is beneficial.


One deductible expense you may be able to control is your property tax payment. You can prepay (by Dec. 31) property taxes that relate to this year but that are due next year, and deduct the payment on your return for this year. But you generally can’t prepay property taxes that relate to next year and deduct the payment on this year’s return.


Don’t forget that the income-based itemized deduction reduction returned last year. Its impact should be taken into account when considering timing strategies.


Not sure whether you should prepay your property tax bill or what other deductions you might be able to accelerate into 2014? Contact us. We can help you determine what steps to take before year end to reduce your 2014 tax bill.
© 2014

Insights

Why Industry 4.0 Represents the Future of Manufacturing

Best Practices

Six Reasons to Perform a Business Valuation

Best Practices

5 Shrewd Tax Planning Moves to Make Before Year-End