Stern, Kory, Sreden & Morgan, AAC
Accelerating Income/Postponing Deductions

If you'll be in a higher tax bracket next year, you may wish to accelerate your income into this year and postpone your deductions into the following year.

You can accelerate your income into this year by:
  • Collecting any debts you are owed
  • Taking distributions from your IRA or retirement plan if you will not incur an early withdrawal penalty
  • Collecting accounts receivable if you're self-employed and use the cash method of accounting
  • Arranging to receive dividends
  • Settling lawsuits, insurance claims, etc.
  • Selling any assets that would result in a capital gain
  • Redeeming any Series EE savings bonds (also called Patriot bonds) that you have elected to defer taxes on until they are redeemed
  • Convert a traditional IRA to a Roth IRA
Lower tax bracket
December 31st Calendar image

Calendar image
Higher tax bracket
You can postpone your deductions into the following year by:
  • Postponing charitable gifts
  • Paying December's deductible expenses on January 1
  • Delaying the payment of deductible interest
  • Scheduling nonemergency dental and doctor's visits for the following year
  • Delaying the realization of deductible capital losses

Prepared by Broadridge Investor Communication Solutions, Inc, Copyright 2011