Fall 2014 1

Year-End Tax Planning: Let’s Get Started

by A. Scott White, CFP®, ChFC, CLU

Taxes may be a guarantee in life, but understanding them isn’t. At Scott White Advisors, we focus on reducing taxes throughout the year to optimize wealth. We employ tax reduction strategies so your money stays where it belongs…with you. With the end of the year quickly approaching, you may be thinking about your taxes and the strategies you can employ to help you minimize the amount of tax you’ll pay. There are several things you may want to consider now to make tax-filing season easier to handle.

Retirement Contributions. Make sure you maximize your retirement plan contributions. This strategy allows you to reduce your adjusted gross income (AGI) and increase your nest egg for retirement. If you are under 50 you can contribute $5,500 to your Traditional or Roth IRA, $12,000 to your Simple IRA and $17,500 to your 401(k), 403(b) or 457(b) plans. If you are over 50 you can contribute $6,500 to your Traditional or Roth IRA, $14,500 to your Simple IRA and $23,000 to your 401(k), 403(b) or 457(b) plans.

Philanthropy. Charitable giving can not only give you great personal satisfaction, it can also give you a current income tax deduction, let you avoid capital gains tax, and reduce the amount of taxes your estate may owe when you die. You can make gifts outright or use a trust. You can name a charity as a beneficiary in your will, or designate a charity as a beneficiary of your retirement plan or life insurance policy. Or, if your gift is substantial, you can establish a private foundation, community foundation, or donor-advised fund. If you are 70½ years of age or older, you can also transfer up to $100,000 directly
from your IRA to a charity tax-free.

Maximize Deductions. A good way to increase your deductions this year is by pre-paying for next year. If you have professional memberships, educational courses, large equipment purchases, or additional mortgage payments, you might benefit from paying those now instead of waiting until the first quarter of 2015.

Offsetting Gains with Investment Losses. I wouldn’t recommend using tax cuts as an investment strategy normally. However, for those in higher tax brackets, selling some under-achieving stocks before year’s end could help you offset gains from earlier in the year. Be sure to get advice from your accountant or tax advisor before implementing these ideas. As always, please contact me on this or any other wealth management issue.

The information contained in this report does not purport to e a complete description of the securities markets or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing materials are accurate and complete. Any opinions are those of Scott White Advisors and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date subject to change without notice. Past performance may not be indicative of future results. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Strategies discussed may not be suitable for all investors. Investing involves risk and investors may incur a profit or loss regardless of strategy selected. Diversification does not ensure a profit or guarantee against a loss. Commodities and currencies investing are generally considered speculative because of the significant potential for investment loss.Their markets are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising.