Year End Planning
As 2014 draws to a close, it is time to focus on year end
strategies to lessen the income tax or transfer tax bite. This year
was the first year that the impact of the 3.8% Medicare tax was
felt by taxpayers. As a consequence, income tax planning has taken
on an even greater meaning for many of our clients. Below are some
strategies and tax tips for you to consider:
1. Income Tax Planning With Trusts. As
mentioned above, recent tax law changes have increased the top
income tax bracket to 39.6%, the top capital gains rate to 20% and
enacted a 3.8% Medicare investment tax for taxpayers in the highest
income tax brackets. The highest income tax brackets apply to
income in excess of $406,750 for individual taxpayers and $457,600
for married taxpayers filing jointly. Unlike individual taxpayers,
trusts are taxed at the highest brackets and subject to the
Medicare investment tax on income over just $12,150. Trust
distributions to a beneficiary
