Accelerating Deductions/Postponing Income
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
Lower Tax Bracket:
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
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