Forecasting Your 2013 Income

 Take a proactive approach to reduce your 2013 tax burden

With the passage of massive 2013 tax law changes, you may be feeling a bit uncertain about how your ultimate 2013 tax liability will be affected. To avoid surprises at tax time, now is the time to take a look at your situation to avoid surprises when filing your tax return.  There is still time left to make an impact on your tax situation but the clock is ticking.

A great starting point in estimating your 2013 tax obligation is the projection of your final 2013 adjusted gross income (AGI).    Here are some questions you may want to ask yourself:

How does your year-to-date income compare to last year’s?  Have earned more or less than last year?

  • Will your filing status change this year?  Did you get married, divorced or could you qualify to file head of household?
  • Do you have any new sources of income or do you expect to have any prior to the end of the year?
  • Do you have any pre-tax deferred savings opportunities that you have yet to take advantage of this year? (Don’t forget your company’s 401(k))
  • Are you expecting any income from which you will not have taxes withheld?
  • Do you have any new deductions this year? (Dependents, medical expenses, or additional mortgage interest)
  • Can you use your year-to-date income to accurately project your total 2013 income?
Answers to these questions will assist you in determining how much your tax situation has changed from last year.



Next Steps

Once you have a good idea of what your 2013 income will be, you still have some steps to take.
  • Adjust Withholdings.  Adjust your withholdings either up or down to accommodate your projected tax obligation Don’t forget your State withholding.
  • Estimated Tax Payments.  You may need to make quarterly estimated tax payments especially if you are self-employed
  • Tax Savings Possibilities.  If you have projected a large tax bill may be in your future, be sure to consult with your tax professional to discuss possible opportunities to reduce that burden.
Note for Small Business Owners
These steps are just as important for small business owners as they are for individuals. Plan to have your tax professional take a look at your books before the end of the 3rd quarter.  Early planning can help you make strategic decisions impacting your business tax obligations.

 

If you have any concerns, please call for a review of your tax situation.