With the end of the year approaching, we all immerse ourselves in the hustle and bustle of the holiday season. It’s a time full of family, friends, love, laughter, and amazing food. However, once the holiday cheer comes to an end it’s time to gather all of our tax information in order to meet the deadline(s). To help you with your 2014 year-end tax planning we have provided a planning guide with information we think is most relevant for you.

2014 Year-end Planning Guide for Individuals:

  • Income Deferral/Exclusion:
  • Receive bonuses earned for 2014 in 2015
  • Minimize retirement distributions
  • Postpone the redemption of U.S. Savings Bonds
  • Delay Roth conversions to 2015
  • Offset tax losses against current gains
  • Sell appreciated assets in 2015
  • Make tax-free gifts of $14,000 per recipient ($28,000 for married joint filers)
  • Complete installment sales to defer gain
  • Execute like-kind exchange transactions
  • Defer billings & collections
  • Declare any special dividends in 2015
  • Defer corporate liquidation distributions until 2015

Deduction/Credit Acceleration:

  • Bunch itemized deductions into 2014/Standard deduction into 2015
  • Accelerate bill payments to 2014
  • Pay last state estimated tax installment in 2014 instead of 2015
  • Minimize the effect of AGI limitations on deductions/credits
  • Make an IRA contribution before April 15, 2015 of up to $5,500 per individual (with catch-up contributions of an additional $1,000 available to individuals age 50 & older)
  • Maximize net investment interest deductions
  • Match passive activity income & losses

Please consider the Patient Protection & Affordable Care Act mandates beginning in 2014:

  • Individuals are required to carry a “minimum essential health coverage” for yourself and your dependents
  • The ability to obtain coverage through an insurance exchange
  • For qualified individuals, eligible lower-income individuals who obtain coverage under a qualified health plan through an insurance exchange may qualify for a premium assistance tax credit.

There are some tax benefits that expired after 2013, we will not know if these will be extended until the end of 2014 or beginning of 2015 but want you to be aware that these tax benefits may not be available to you for 2014. Here are some that we think are most relevant for you:

  • Credit for residential energy property
  • Qualified tuition and related expenses deduction
  • Itemized deduction for state and local sales taxes
  • Deduction of up to $250 for certain expenses of elementary & secondary school teachers
  • Exclusion from gross income of qualified charitable distributions from individual retirement plans for individuals aged 70 ½ and older


Lastly, please be aware of changes in inflation-adjusted taxes and phase-out amounts for income tax, net investment income tax (NIT), itemized deduction phase out, and personal exemptions. These changes can be found on the IRS website, www.irs.gov. If you have questions regarding what we have discussed, please feel free to contact us. Have a safe and happy holiday season!



Source: IntelliConnect, “2014 Tax Planning for Individuals”