2012 is entering its final quarter, and that means it’s time to start year-end tax planning. This year presents a bigger challenge than most, as the Bush-era tax cuts are set to expire unless Congress takes action soon. If the tax cuts expire it will result in higher tax rates for individuals, including capital gains and dividends, as well as higher estate tax rates. [Read more…] about Thinking about Selling a Vacation Home? Get it Done Before 2013
Income Tax Planning
Medical Expense Deduction set to Decrease for those under 65
This year, unreimbursed medical expenses are deductible to the extent they exceed 7.5% of your adjusted gross income (AGI), but in 2013, for individuals under age 65, the “floor” will be raised to 10% of AGI. If you can accelerate your “discretionary” medical expenses you were planning on incurring anyway next year it would be to your advantage to do so. Examples include prescription glasses, and elective procedures not covered by insurance such as orthodontic work. Also, consider using a credit card to prepay medical expenses. As long as it is billed in 2012, a medical expense can be deducted in 2012 regardless of when the credit card company is paid.