Law Offices of Connie Yi, PC - estate planning
Tell Us About Your Case

For the safety of our community, clients and staff, we have suspended all in-person meeting effective March 17, 2020. All consultation meetings will be via Phone or Zoom Video Conferencing. Please contact us at 925-484-0888 or email us directly at [email protected] to schedule the consultation.

Bay Area Estate And Tax Planning Law Firm
Estate Planning
Trust Administration and probate

Deduction planning during political gridlock

| Oct 19, 2012 | Uncategorized |

Our Bay Area readers are no doubt aware that the national election is just days away and depending upon who wins the Presidency, there may be changes in personal income tax deductions. If fact, no matter who wins there may be changes to the income tax code. So what are we all to do?

According to financial sources, it may be a good idea to accelerate large write-offs as well as income before any changes are made to income tax law. As a practical matter, this means taking a look at your deductions.

Not everyone itemizes their deductions. The Tax Policy Center in Washington reports that 12 percent of taxpayers making $63,000 or less itemize their deductions compared to 90 percent of taxpayers making $150,000 or more.

The largest income tax deductions for most of us are home mortgage interest, employer-provided health insurance and retirement contributions. Another important deduction is the charitable donation deduction which is currently unlimited.

Those who are concerned about minimizing their tax liability may want to consider the following:

  • Accelerate state income and property tax payments
  • Pay medical-insurance premiums or other deductible costs ahead of time
  • Make any planned large purchases in 2012 so state sales tax can be deducted, if the purchase can pass the 7.5 percent hurdle
  • Make significant charitable contributions

At this point in time we do not know what will happen to either the tax rates or the tax deductions for next year. In either case, it is always good advice to work with experienced professionals when planning a tax strategy for now and for the future.

Source: Wall Street Journal, “Protecting Your Deductions,” Laura Saunders, Oct. 12, 2012

  • At our San Francisco law office, we represent clients with tax issues including those dealing with IRS issues such as tax returns, IRS audits, charitable gifting and other tax compliance issues.

Archives

FindLaw Network

Recent Blog Post

Is estate planning necessary for young people?

Misconceptions exist about the relationship between age and estate planning. Yes, older people may prioritize estate planning for reasons related to advancing age and health concerns. That does not mean only older California residents benefit from the process. Young...

What are the responsibilities of a fiduciary?

Residents of California may want to learn more about the role of the fiduciary and their responsibilities. Because fiduciary duty may be a requirement among certain professions, clients and professionals should know more about what this is. The meaning of fiduciary...

5 factors to consider when choosing a guardian

For parents, one of the biggest reasons they decide to create an estate plan is to ensure their child will be cared for no matter what. It isn’t easy to think about a tragedy where a child may lose both their parents before they turn 18, but parents have to plan for...

View More Blog Posts