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It pays to take action now on finances, taxes

As the year winds down, wealthier taxpayers are examining whether they can avoid higher federal tax rates for 2013, while those with more modest incomes are pondering whether they can qualify for subsidies for Obamacare health care premiums next year.

Meanwhile, married same-sex couples are preparing for their first opportunity to file federal tax returns as married people next year. And teachers, retirees and those going through foreclosure are looking at tax breaks that may not be extended beyond 2013.

Fall is a natural time for year-end tax and financial planning. And local accountants and financial planners are encouraging their clients to examine their finances and to make changes now to improve their bottom lines.

"Do nothing is the worst planning you can do," said Bruce Dzieza, CEO of Willow Creek Wealth Management in Sebastopol.

Maria Thomas, a CPA and partner at Phillips & Thomas in Santa Rosa, said the year-end planning offers clients the chance to reduce their tax liability but also to prepare if they may owe extra taxes next April.

"Then they have four or five months to plan for it, rather than to find out a month before that they owe $10,000," said Thomas.

This year features some noteworthy tax changes, especially for higher-income taxpayers.

The highest tax rate has been raised for 2013 to 39.6 percent from 35 percent for married couples with at least $450,000 in taxable income and for individuals with at least $400,000.

Capital gains taxes for Americans in that highest tax bracket have jumped to 20 percent, up from 15 percent.

As well, the Affordable Care Act, also known as Obamacare, places a 3.8 percent tax on married couples with at least $250,000 of income and for individuals with at least $200,000. Those with similar incomes also are subject to an added Medicare Tax of 0.9 percent.

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