Year-End Tax Strategies for 2013
- Henderson, NV
At Sundvick Legacy Center we love working with Financial Advisors and CPAs throughout Nevada. We understand that by working as a team we can create winning tax saving strategies for you and your estate! As 2013 comes to a close the focus narrows in on making the most of year-end planning. Individuals are often not aware of tax planning opportunities available to them. Something as simple as a review of an existing estate plan, new assets, life changes, etc. may reveal time sensitive opportunities to help you save tax dollars!
Distributions of Income from a Trust
A Trust may be subject to the 39.6% tax bracket plus the 3.8% Net Investment Income Tax (NIIT) once taxable income exceeds $11,950 for 2013. Looking at a tax rate of 43.4% is not optimal. One idea to lower the tax rate would be to make a discretionary distribution of income to a beneficiary. Beneficiaries often fall into much lower tax brackets. Making this discretionary distribution can do 3 things: minimize tax rates for the Trust, give the Trust a Distributable Net Income (DNI) deduction and allow the distributed funds to be taxed at a lower rate and likely not subject to the NIIT. As fiduciaries, Trustees must make educated decisions of whether this type of distribution would be beneficial to the estate plan as a whole.
A variety of events may have occurred over the past year causing a spike in income for a household. Things like salary bonuses and asset sales triggering large capital gains can significantly increase the 2013 tax burden. Making charitable contributions can not only benefit your favorite charity but also your personal finances. There are ways to design charitable gifts in order to maximize your personal tax result including charitable remainder trusts and charitable lead trusts. Such opportunities must be specifically tailored to your family's estate and financial planning needs and can be a huge boost to your tax planning goals.
We encourage you to contact your CPA to discuss year-end tax strategy opportunities. If you need a referral to a qualified CPA please contact our office at 702-384-3767 or email firstname.lastname@example.org.
©Sundvick Legacy Center 2013