END OF THE YEAR TAX THOUGHTS: 

As the end of the year approaches, your tax liability is beginning to solidify. As the ball drops in Times Square next week, most of your ability to plan for your 2014 bill goes out with the old year.

• Consider your income and expenses for 2014 and 2015.
  • Would you be better to defer some income or expenses into 2015?
  • Would you be better to accelerate some income or expenses into 2014?
  • Normally, it is better to defer income and accelerate expenses. However, each situation is different.
  • Businesses have greater ability to do this than most individuals.

• Consider making a contribution to your retirement plan.
  • The employee contribution to a 401k must be made by December 31^st.
  • The employer contribution may be made until April 15^th of the following year.
  • If you have an IRA, you have until April 15^th to make a contribution for the prior year.

• If you have a Flexible Spending Account for child care, medical, or other designated expenses, you must use it by the end of the plan year.

• Of course, it is essential to track your expenses, both personal and business, for tax purposes and accounting purposes.
  • The burden is on you to prove that you have a tax-deductible expense.

• If you’ve haven’t kept good records this year, make a New Year’s resolution to be better at record keeping in 2015.

• Estimated payments must be made quarterly for individuals with income exceeding their withholdings.
  • The last quarterly estimated payment is due January 15^th.

As today is Christmas Eve, Merry Christmas to all…and to all a good night! Ho, Ho, Ho!

Avoid Unnecessary Family Disputes with a Letter of Instruction

By: Sanford M. Fisch, CEO & Co-Founder, American Academy of Estate Planning Attorneys, Co-Author of The E-Myth Attorney Posted in Client Services, Estate Planning, General

The time immediately after the death of a loved one can be stressful and overwhelming. Family members are grieving, and on top of this, they must handle a variety of organizational and legal tasks. In many cases, there can also be disputes concerning who gets certain possessions, which can make the whole situation even messier and create some ugly conflicts. Fortunately, you can minimize many of these complications by addressing these matters ahead of time and creating a letter of instruction, which is generally broken down into three parts.

1) Funeral Arrangements

This typically begins with making a list of all the people, organizations, agencies and professionals who should be notified upon your death. You should include contact information like phone numbers, email and mailing addresses, along with any other pertinent details. If you are an organ or tissue donor, you will want to also include relevant information.

You will need to leave everything your loved ones should know about your burial method, including whether you will be buried in a plot or cremated. In the event that you have paid for funeral arrangements in advance, you should include this information as well.

2) Financial and Personal Affairs

When it comes to finances, you can start by listing contact information for your attorney, stockbroker, employer, insurance agent, financial planner, etc. You should make it as easy as possible to reach anyone involved with your financial matters. It’s also important to make note of all your financial accounts such as checking, savings, retirement funds and credit cards. If you want to contribute to any charitable organizations, you will also need to include their contact details.

For personal affairs, you should state the location of documents like your birth certificate, marriage certificate, divorce papers, diplomas, etc. This should streamline things and make it much easier for your loved ones to get your documents organized.

Because there is a lot of sensitive information concerning financial and personal affairs, you need to ensure that all records are kept in a safe place like a fireproof lock box in your home. The only people who should have access to the lock box are you and your executor.

3) Distribution of Personal Effects

Finally, it’s smart to go in depth about how your personal possessions should be distributed among family and friends. Basically, this will elaborate upon your will and take it one step further so there is no confusion or disputes. This is where you state who gets smaller items like your electronics, books, dishes and so on.

While there is some debate as to whether you should discuss whom you plan to give what ahead of time, it’s usually not a bad idea to sit down and go over things while you can still get everyone’s input. If a certain family member has no interest in a particular item, then you could give it to a different family member who could make better use of it. Also, don’t forget to make arrangements for who will care for your pets.