4 Midyear Tax
Planning Ideas +
Beware of Phishing
planning is a year-round process, so now is a good time to
think about the following:
you considering making a cash gift to a relative? If so,
consider making the gift in conjunction with the overall
revamping of your stocks and mutual funds held in taxable
brokerage accounts to achieve better tax results.
Donít gift loser shares (currently worth less than you paid
for them). Instead, sell these shares, recognize the capital
loss on your tax return, and then gift the cash proceeds to a
relative. However, do gift winner shares to lower tax bracket
relatives (unless they are under age 24 and subject to the
Kiddie Tax). The 2014 annual gift tax exclusion is $14,000.
you considering making a contribution to a favorite charity?
The previous strategies will also work well for contributions
to qualified charities. Sell loser shares, recognize the loss
on your tax return, and then give the cash proceeds to the
charity and claim the resulting charitable contribution (if
Donate winner shares to the charity and deduct the full
current fair market value at the time of the gift (without
being taxed on the capital gain). The tax-exempt organization
can sell your donated shares without owing tax.
you self-employed? Consider employing your child in the
business (but pay a reasonable wage for their age and work
skills). This practice can shift income (which is not subject
to the Kiddie Tax) to the child who is normally in a lower tax
bracket, decrease payroll taxes, and enable the child to
contribute to an IRA.
your estate plan current? If you already have an estate
plan, it may need updating to reflect the current estate and
gift tax rules. For 2014, the unified federal gift and estate
tax exemption is a generous $5.34 million, and the rate is
Furthermore, the impact of the Supreme Courtís Windsor
decision and resulting IRS changes in the federal definition
of marriage mean that legally married same-gender couples need
to revise their estate plan. Plus, there may be nontax reasons
to update your estate plan.
Please contact me at
to discuss any tax planning
strategies you are interested in implementing.
is a scam typically carried out by unsolicited e-mail and/or
bogus websites posing as legitimate sites luring unsuspecting
victims to provide personal and financial information.
The IRS has recently warned
consumers to watch for e-mails appearing to be from the
Taxpayer Advocate Service (TAS) that include a bogus case
The e-mail may include the
following message: "Your reported 2013
income is flagged for review due to a document processing
error. Your case has been forwarded to the Taxpayer Advocate
Service for resolution assistance. To avoid delays processing
your 2013 filing contact the Taxpayer Advocate Service for
The e-mail may contain links
appearing to provide information about the "advocate" assigned
to the recipientís case but actually lead to Web pages
soliciting personal information.
If you receive an e-mail
claiming to be from the IRS that contains a request for
personal information, do not reply to the e-mail, open any
attachments, or click on any links. Instead, forward the
e-mail to the IRS at firstname.lastname@example.org. After forwarding the
e-mail to the IRS, delete the original e-mail you received.
Remember, the IRS, including
the TAS, does not initiate contact with taxpayers by e-mail,
text, or any social media.
If you receive a phone call from
an individual claiming to be from the IRS but you suspect they
are not an IRS employee:
(1) Ask for a call-back number
and employee badge number, and
(2) contact the IRS to determine
if the caller is an IRS employee with a legitimate need to
If you determine it is a
legitimate call, then call the IRS employee back or call us to
handle it for you. If you receive a notice or letter via paper
mail, contact us to help you determine if it is a legitimate
IRS letter. If it is a legitimate IRS letter, we can help you
reply if needed.
For information on how to
contact the IRS, see
http://www.irs.gov/uac/How-to-Contact-the-IRS-1. If either
the caller or letter is not legitimate, report the incident to
the Treasury Inspector General for Tax Administration at
Remember you can call our
offices if you have any questions about these or any other
accounting, tax, financial planning or business planning
related issues, at 219-462-7544.
Harold Gatlin, CPA