How to lower your income tax bill before 2014 ends

As we approach the end of 2014, it is time to start thinking about federal income taxes. Though it is not necessarily a pleasant thing to consider, there is good news: time remains to take action to reduce your tax bill come 2015.

A few things you can do now may result in significant tax savings on April 15. Here are three strategies provided by MarketWatch:

1. Time investment decisions carefully. The tax on long-term capital gains from the sale of stocks and similar investments is lower than if the investor holds onto the stock for less than a year and a day. Those in a low enough tax bracket may even pay no tax on long-term capital gains. Meanwhile, selling securities that have dropped in value since you bought them may make sense now. Reporting those losses can offset taxable gains from earlier in the year.

2. If your income is too high to collect long-term capital gains tax-free, MarketWatch recommends transferring ownership of some stock or mutual fund shares that have appreciated to a family member with a qualifying income, especially if he or she is 24 or older. The relative can then sell the securities and pay no taxes.

3. Converting a traditional IRA account into a Roth IRA can save you considerable taxes in the long run.

There are many strategies for reducing your income tax obligation, but the IRS’ rules can be complicated, and they change frequently. If you are unsure what you are doing could lead to an audit or criminal charges, you may wish to consult a tax attorney.

No Comments

Leave a comment
Comment Information
Email Our Team

Contact Us to Get Started Today

Located in the Washington, D.C area, we serve clients in the District of Columbia, Maryland and Northern Virginia, as well as across the country and overseas. For a free initial consultation, call 202-381-1261 or complete our brief online form.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Six Convenient Office Locations in and around the DC Metropolitan Area

Washington, D.C.
1629 K Street NW, Suite 300
Washington, D.C. 20006

Phone: 202-618-1873
Fax: 888-235-8405
Washington Law Office Map

Columbia Office
10440 Little Patuxent Parkway, Suite 300
Columbia, MD 21044

Phone: 410-497-5947
Fax: 888-235-8405
Columbia Law Office Map

Annapolis Office
839 Bestgate Road
Suite 400
Annapolis, MD 21401

Phone: 410-497-5947
Fax: 888-235-8405
Annapolis Law Office Map

Fairfax Office
8280 Willow Oaks Corporate Drive
Suite 600
Fairfax, VA 22031

Phone: 703-621-7169
Fax: 888-235-8405
Fairfax Law Office Map

Rockville Office
199 E. Montgomery Avenue
Suite 100
Rockville, MD 20850

Phone: 240-599-5009
Fax: 888-235-8405
Rockville Law Office Map

Baltimore Office
400 East Pratt Street
8th Floor
Baltimore, MD 21202

Phone: 443-743-3381
Fax: 888-235-8405
Baltimore Law Office Map