Monthly Archives: November 2014

Check Now to see if Investments Can Save on 2014 Taxes

Review gains and losses to see if action by Dec. 31 can save on taxes.

Appreciating investments that don’t generate current income aren’t taxed until sold, deferring tax and perhaps allowing you to time the sale to your tax advantage.  Review your year-to-date gains and losses now to see if selling any additional investments by Dec. 31 can reduce your 2014 tax liability.

investFor example, if you’ve cashed in some big gains during the year, look for unrealized losses in your portfolio and consider selling them to offset your gains.  Or if you have net losses, consider selling some appreciated investments, because the losses can absorb the gain.  If net losses exceed net gains, you can deduct only $3,000 ($1,500 for married filing separately) of the net losses against ordinary income, though you can carry forward excess losses indefinitely.

If you bought the same investment at different times and prices and want to sell high-tax-basis shares to reduce gain or increase a loss to offset other gains, be sure to specifically identify which block of shares is being sold.

For more ideas on how to reduce taxes on your investments, contact us.  Ciuni & Panichi, Inc.  can provide strategies that are right for your situation.  But don’t wait most strategies must be implemented by Dec. 31 to reduce your 2014 tax liability.  Contact Jim Komos at 216.831.7171 or jkomos@cp-advisors.com for more information.

The tax experts at Ciuni & Panichi have been assisting taxpayers for over 40 years, and we look forward to helping you.

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Beware of Alternative Minimum Tax Triggers

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© 2014

Expiring Tax Breaks

Any chance they will be extended?

David Reape HighRes-08It may feel like a recurring nightmare but here we are again near the end of the year and we still do not know what the key tax provisions will be.  Will the lame-duck Congress tackle the issue?   Find out what you need to do to be prepared.

With the first major winter storm hitting most of the country this past week, we are reminded now is the time to think about year-end planning.  And just as Mother Nature is wreaking havoc with our morning commutes, Congress is also wreaking havoc with the tax law by allowing a number of important expired tax provisions to languish over the course of the summer.  The IRS Commissioner recently made several public comments warning Congress that failure to take action soon would likely delay the start of tax filing season and delay the payment of refunds to taxpayers.

Now that the mid-term elections are behind us, Congress has started to act on passing some sort of extenders bill but the path is still very uncertain.  Some of the more popular business tax breaks such as the 50% bonus depreciation deduction, increased Section 179 expensing deduction and the research tax credit will very likely get extended in some form.  The developing debate which threatens to delay the bill is, for how long?  It’s very probable these provisions will see an extension through the end of 2015.  There are a number of House members who are pushing to make these provisions permanent.  This debate threatens to delay passage of the bill until early next year.

A further topic which could delay passage of the tax extenders bill are the various energy related tax incentives.  The wind energy credits have long been supported by Democratic lawmakers but the recent gains by the GOP in the mid-term elections have put these provisions squarely in the target circle for possible cuts or outright repeal.

In spite of the political posturing going on in Washington, we anticipate passage of the more popular tax provisions.  We may not know for certain until next year.  As the tax extenders bill develops, we will keep you posted on the status of those changes.

If you have questions about tax legislation or would like assistance in determining how to make the most of your tax provisions, the tax professionals at Ciuni & Panichi can help you start planning now.  For more information, please contact David Reape at 216.831.7171 or dreape@cp-advisors.com.

David Reape is Principal in the firm’s Tax Department.  He has experience in all facets of taxation for individuals, closely held businesses, their owners and key personnel.  His clients are in a wide range of industries, including not-for-profit, manufacturing, service, restaurants, and health care.

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Beware of Alternative Minimum Tax Triggers

College Tax Breaks Help Save You Money

© 2014

Capital Gains Tax – Zero Percent

How higher-bracket taxpayers can take advantage of the 0% long-term capital gains rate.

7_istock_000005830377large_seedlingThe long-term capital gains rate is 0% for gain that would be taxed at 10% or 15% based on the taxpayer’s ordinary-income rate. If you have loved ones in the 0% bracket, you may be able to take advantage of it by transferring appreciated assets to them. The recipients can then sell the assets at no federal tax cost.

Before acting, make sure the recipients you’re considering won’t be subject to the “kiddie tax.” This tax applies to children under age 19 as well as to full-time students under age 24 unless the students provide more than half of their own support from earned income.

For children subject to the kiddie tax, any unearned income beyond $2,000 (for 2014) is taxed at their parents’ marginal rate rather than their own, likely lower, rate. So transferring appreciated assets to them will provide only minimal tax benefits.

It’s also important to consider any gift and generation-skipping transfer (GST) tax consequences. For more information on transfer taxes, the kiddie tax or capital gains planning, please Jim Komos at 216.831.7171 or jkomos@cp-advisors.com. We can help you find the strategies that will best achieve your goals.

Mr. Komos is the Partner-in-Charge of the firm’s Tax Department.  He has experience in all facets of taxation for individuals, closely held businesses, their owners and key personnel.  His clients are in a wide range of industries, including manufacturing, service, real estate, and construction.

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© 2014