inc tax document note review

892019 Inc Tax Document note review

httpslidepdfcomreaderfullinc-tax-document-note-review 14

Eight timely ideas thatmay cut your tax bill

If you typically put off thinking about your taxsituation until January (or later) your procrasti-nation may well be costing you The fact is thatthinking about taxes before December 31 mayallow you to take steps to help reduce theamount you send the IRS for 2014

Rather than putting it off we recommend youreview these tips today and contact your tax

professional and Financial Advisor as soon aspossible to determine which ones may workfor you

A little preparation can go a long way



Eight timely tax983085saving ideas983090

In general you can use capital losses to offset capitalgains thereby reducing how much you owe theIRS In addition if you have capital losses leftover

after you offset your capital gains you can use up to983076983091983088983088983088 of them to reduce your taxable income If youhave more losses than that you can carry them overto reduce your income in future years

To deduct your losses you have to ldquorealizerdquo themby selling investments But before you sell askyour Financial Advisor for a realized and unrealizedgainloss report to assess how much additionalincome andor capital gains you should expect andhow to manage that income Then talk with youradvisors about near-term portfolio moves to helplessen 983090983088983089983092 taxes

Take care when selling and repurchasingIf you want to realize a loss on an investment that youwant to hold on to the simple solution is to sell yourposition thus realizing the loss and then repurchasethe same investment While you certainly can do thisyou have to be careful to avoid violating whatrsquos knownas the ldquowash salerdquo rule

The wash sale rule wonrsquot let you claim a current taxloss if you buy (including through dividend reinvest-ment) the same or substantially identical securitywithin 983091983088 calendar days before or after the trade date

of the sale that established the loss (a period of 983094983089 cal-endar days) The lesson here is to wait more than 983091983088days before you repurchase the investment or if yoursquodrather not wait to purchase the same investment youcan buy something thatrsquos similar but not substantiallyidentical to what you sold

Consider ldquodoubling uprdquoRather than selling your losing investment first youmay prefer to double up which is a strategy whereyou purchase the additional shares of the security youown before selling your original position The lastday to double up (purchase the additional shares) forthis year is November 983090983096 983090983088983089983092 If you wait later thanthat you wonrsquot be able to sell your current position toestablish the loss for this year without violating thewash sale rule

Making gifts to charity before yearend may reduceyour tax bill if you can itemize your deductions Hereare important points to keep in mind

u Cash contributions to charities must arrive by December 31 If yoursquoremaking a contribution by check the date you mail or deliver it willbe considered the date of the gift (assuming the check clears indue course)

u If yoursquore making a charitable contribution to a gift fund the accountmust be open and the deposit completed before December 31 toqualify as a 2014 gift

u If you are counting on an itemized charitable tax deduction andyour adjusted gross income (AGI) is more than $254200 (single) or$305050 (marriedjoint) be sure you understand the phase-outrules regarding itemized deductions

If yoursquore planning to make nondeductible gifts tofriends or family members keep in mind you cangive only 983076983089983092983088983088983088 (983076983090983096983088983088983088 when combined withyour spouse) to an individual without generatinggift tax implications Also gifts must be completedby December 983091983089 to qualify as 983090983088983089983092 annualexclusion gifts

Education Savings Accounts (ESAs) and 983093983090983097 planaccounts are similar ndash theyrsquore both tax-advantagedvehicles to save for higher education expensesTheyrsquore also alike in that a distribution and thepayment of the qualified education expense mustoccur in the same tax year for both ESAs and 983093983090983097plan accounts Otherwise the distribution couldbe considered a nonqualified withdrawal subjectto ordinary income tax and a 983089983088983077 penalty on theearnings portion (unless an exception applies)

However the rules for making 983090983088983089983092 contributions

differu 529 plan contributions must be deposited into the account no

later than December 31 If yoursquore opening a new account it mustbe open and the deposit received by the sponsor company no laterthan December 31

u ESA contributions for 2014 can be made until April 15 2015



Eight timely tax983085saving ideas 983091

Age 983095983088frac12 or older Thinking about QCDs

As of September Congress has not reinstated qualified charitable distributions (QCDs) which allowed youto make tax-free contributions up to $100000 from your traditional IRA directly to qualified charities After

the midterm elections itrsquos possible QCDs ndash along with other tax-related ldquoextendersrdquo ndash could be re-enacted If you believeyou could benefit from QCDs stay in close touch with your tax professional and Financial Advisor for last-minute 2014tax legislation updates

If yoursquore not putting the maximum amount allowedinto your employerrsquos 983092983088983089(k) or 983092983088983091(b) considerincreasing your contributions as soon as possible

The maximum you can defer into these plans in 983090983088983089983092is 983076983089983095983093983088983088 (983076983090983091983088983088983088 if yoursquore age 983093983088 or older) Thedeadline to make these contributions for this year isDecember 983091983089 983090983088983089983092

If yoursquore able to participate in a nonqualified deferredcompensation (NQDC) plan at your employer youmay want to boost the amount yoursquore contributing

Flexible Spending Accounts (FSAs) and HealthSavings Accounts (HSAs) generally require annualre-enrollment if you want to continue to participate Ifyou do review your 983090983088983089983092 out-of-pocket expenses andadjust your 983090983088983089983093 contribution amounts accordingly(Note Many FSA arrangements are use-it-or-lose-itbalances are forfeited at year-end [confirm with youremployer] HSA balances however can be carriedforward from year-to-year)

If yoursquore in a position to defer income you wouldnormally receive in 983090983088983089983092 ndash a bonus for example ndash into983090983088983089983093 you may want to do so especially if you thinkitrsquoll be taxed at a lower rate if you receive it next yearAsk your tax advisor about paying for deductible ex-penses such as state income taxes in 983090983088983089983092 providedyou can fully deduct your itemized deductions

Exercising incentive stock options (ISOs) or nonqual-ified stock options (NSOs) or restricted stock grantsvesting in 983090983088983089983092 could have significant tax conse-

quences including alternative minimum tax (AMT)implications (see 983075983096) If you have been granted anytype of company stock benefit work closely withyour tax professional to develop both a short- andlong-term strategy for managing these valuablebenefits tax efficiently

Even by IRS standards the AMT rules are remarkablycomplex Suffice it to say your chances of payingAMT may increase if you have

u Several dependents

u Interest deductions from home equity loans or refinanced mortgagesthat were not used to buy build or improve your home

u Interest from certain private activity municipal bonds (AMT bonds)

u High ordinary income or capital gains andor high state andlocal taxes

u Exercised incentive stock options (ISOs) where you continue tohold the stock

Depending on your personal situation other AMTadjustments may apply Even limited exposure to oneor two items that trigger AMT may subject you to thetax Be sure to ask your tax professional about yoursituation and whether AMT plays a factor in youryear-end strategies



Envisionreg is a registered service mark of Wells Fargo amp Company and used under license

Wells Fargo Advisors designed this publication to provide accurate and authoritative information on the subject matter coveredWells Fargo Advisors makes it available with the understanding that the firm does not render legal accounting or tax preparationservices For tax or legal advice seek the services of competent tax or legal professionals

Wells Fargo Advisors believes investment decisions should be based on investment merit not solely on tax considerations Howeverthe effects of taxes are critical in achieving a desired after-tax investment return Wells Fargo Advisors has based the information

provided on internal and external sources that the firm considers reliable however Wells Fargo Advisors does not guarantee theinformationrsquos accuracy

0914-04345

9 4 9 1 1

1

0000592644 (Rev 00 1 each)

Investment and Insurance Products NOT FDIC Insured NO Bank Guarantee MAY Lose Value

Wells Fargo Advisors is the trade name used by two separate registered broker-dealers Wells Fargo Advisors LLC and Wells Fargo Advisors Financial Network LLC Members SIPC non-bank affiliatesof Wells Fargo amp Company First Clearing LLC is a registered broker-dealer and non-bank affiliate of Wells Fargo amp Company copy 983090983088983089983092 Wells Fargo Advisors LLC All rights reserved

Three steps to take starting today

983089 Schedule an appointmentwith your tax professionalto discuss your situationand review your 2014 taxprojection

983090 Follow-up with your FinancialAdvisor to evaluate yourportfolio strategies and anyinvestment changes that mayhelp lessen your 2014 tax billIf it appears yoursquoll be in one ofthe upper brackets ask yourFinancial Advisor for a copy ofour report ldquoTax Strategies forHigher-Income Taxpayersrdquo

983091 Go beyond tax planningand create or update yourEnvisionreg investmentplan profile Unlike otherinvestment planning toolswith an Envision plan youcan easily make adjustmentsto account for tax planningconsiderations or changesin your life (births deathsmarriages divorces etc)

For more information contact your Financial Advisor If you donrsquot have a Financial Advisor with

Wells Fargo Advisors please use the locator available at wellsfargoadvisorscom to find a branch near you



Eight timely tax983085saving ideas983090

In general you can use capital losses to offset capitalgains thereby reducing how much you owe theIRS In addition if you have capital losses leftover

after you offset your capital gains you can use up to983076983091983088983088983088 of them to reduce your taxable income If youhave more losses than that you can carry them overto reduce your income in future years

To deduct your losses you have to ldquorealizerdquo themby selling investments But before you sell askyour Financial Advisor for a realized and unrealizedgainloss report to assess how much additionalincome andor capital gains you should expect andhow to manage that income Then talk with youradvisors about near-term portfolio moves to helplessen 983090983088983089983092 taxes

Take care when selling and repurchasingIf you want to realize a loss on an investment that youwant to hold on to the simple solution is to sell yourposition thus realizing the loss and then repurchasethe same investment While you certainly can do thisyou have to be careful to avoid violating whatrsquos knownas the ldquowash salerdquo rule

The wash sale rule wonrsquot let you claim a current taxloss if you buy (including through dividend reinvest-ment) the same or substantially identical securitywithin 983091983088 calendar days before or after the trade date

of the sale that established the loss (a period of 983094983089 cal-endar days) The lesson here is to wait more than 983091983088days before you repurchase the investment or if yoursquodrather not wait to purchase the same investment youcan buy something thatrsquos similar but not substantiallyidentical to what you sold

Consider ldquodoubling uprdquoRather than selling your losing investment first youmay prefer to double up which is a strategy whereyou purchase the additional shares of the security youown before selling your original position The lastday to double up (purchase the additional shares) forthis year is November 983090983096 983090983088983089983092 If you wait later thanthat you wonrsquot be able to sell your current position toestablish the loss for this year without violating thewash sale rule

Making gifts to charity before yearend may reduceyour tax bill if you can itemize your deductions Hereare important points to keep in mind

u Cash contributions to charities must arrive by December 31 If yoursquoremaking a contribution by check the date you mail or deliver it willbe considered the date of the gift (assuming the check clears indue course)

u If yoursquore making a charitable contribution to a gift fund the accountmust be open and the deposit completed before December 31 toqualify as a 2014 gift

u If you are counting on an itemized charitable tax deduction andyour adjusted gross income (AGI) is more than $254200 (single) or$305050 (marriedjoint) be sure you understand the phase-outrules regarding itemized deductions

If yoursquore planning to make nondeductible gifts tofriends or family members keep in mind you cangive only 983076983089983092983088983088983088 (983076983090983096983088983088983088 when combined withyour spouse) to an individual without generatinggift tax implications Also gifts must be completedby December 983091983089 to qualify as 983090983088983089983092 annualexclusion gifts

Education Savings Accounts (ESAs) and 983093983090983097 planaccounts are similar ndash theyrsquore both tax-advantagedvehicles to save for higher education expensesTheyrsquore also alike in that a distribution and thepayment of the qualified education expense mustoccur in the same tax year for both ESAs and 983093983090983097plan accounts Otherwise the distribution couldbe considered a nonqualified withdrawal subjectto ordinary income tax and a 983089983088983077 penalty on theearnings portion (unless an exception applies)

However the rules for making 983090983088983089983092 contributions

differu 529 plan contributions must be deposited into the account no

later than December 31 If yoursquore opening a new account it mustbe open and the deposit received by the sponsor company no laterthan December 31

u ESA contributions for 2014 can be made until April 15 2015



























0914-04345

9 4 9 1 1

1

0000592644 (Rev 00 1 each)



































0914-04345

9 4 9 1 1

1

0000592644 (Rev 00 1 each)









inc tax document note review

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