January 13, 2014

Greetings! I trust that this finds you well and enjoying life.

Time marches on and you’ll soon be receiving your 2013 W-2 and 1099’s. So it’s not too soon to begin thinking about preparing your 1040 return for last year and all that is involved in that. Getting a jump on putting all that information and getting the return done early is so empowering for me, as I’m sure it is for you.

For most individuals the 2013 federal income tax rates are the same as for 2012, as nothing changes up to maximum rate which increase to 39.6%.This applies to single persons with taxable income above $400,000 and married couples filing jointly with taxable income above $450,000. If you find yourself at those income levels the long term capital gains tax rate increases from 15% to 20% as well.

In retirement it is important to study your tax situation and the effect that your income has, as far as drawing your social security benefit into a taxable situation. Also Medicare premiums are means based, therefore the greater your income the greater your premiums. Point being, being deliberate and strategic about how, when and where you take income in retirement, can perhaps save you money. Paying less in taxes is the same as finding money on the ground. For that reason, income planning in retirement can be as relevant as portfolio planning.

If you have questions or feel that I can be of use in any way don’t hesitate to call.

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