It’s time for New Years’ Resolutions! Making the most of your current income and saving on income taxes can help you maximize your estate. This is an important part of estate planning.
I often read that it can be smart to “group” your income tax deductions every other year in order to maximize your tax savings. So that one year, you might take the “standard deduction” on your tax return, and the next year, itemize your deductions. Steps such as paying your real property taxes due in early 2013 before the end of 2012, and making some charitable deductions you would otherwise make in early 2013 early at the end of 2012, could be utilized to group and maximize your 2012 itemized deductions. This strategy can be particularly helpful if you have your home paid for and no longer have the mortgage interest deduction.
You deduct the greater of the “standard” deduction or itemized deductions on your federal 1040 income tax return. For 2012, the standard deduction for married filing jointly is $11,900! For married filing separately or single, the standard deduction is $5,950; for head of household it is $8,700. You get an additional $1,450 if you are blind or elderly and single; or $1,150 if blind or elderly and married.
Contact your tax advisor and/or financial planner to work through whether this strategy might save you taxes. If you do not have a tax advisor or financial planner, Hindson & Melton LLC can refer you to qualified profesionals in your area.
Hindson & Melton LLC wants to work with you to maximize your estate for your loved ones – and legally minimize the amount you pay in taxes. Contact Hindson & Melton LLC for your estate planning needs this year!
For more information about this post, contact Karen S. Hindson of Hindson & Melton LLC.