Estimating your income for 2011 and as much as possible for 2012 can help you plan a strategy to minimize tax consequences for both years. If your income will likely be lower in 2011 than in 2012 you can prepay some expenses like college tuition or home mortgage interest and take advantage of more deductions or credits this year if there’s a chance your income will be so high as not to qualify for those deductions and credits next year. Likewise, if you think your income will be lower next year than this year, you may be able to take advantage of more deductions next year. For example, you can pay the January mortgage in December and move the interest deduction for that payment to 2011 or you can pay the January payment in January and move the interest deduction for that payment to 2012.
This is one small strategy but simply knowing your tax liabilities, your income, and the tax laws can add up to significant savings in taxes over the years. Smart strategies in estate planning can also save you money on taxes.
Getting Legal Help
Working as a team with an estate planning attorney you can create plan which preserves assets, minimizes taxes and protects loved ones. Experienced Estate Planning Attorney Elga Goodman can help you understand your options for tax-saving strategies. Call us today at 973-841-5111.