Gilman Ciocia, Inc. Stresses Importance of a Mid-Year Tax Review

Tax & financial planning services firm lists reasons to plan now to avoid high taxes in 2011

Jun 02, 2010, 11:55 ET from Gilman Ciocia, Inc.

POUGHKEEPSIE, N.Y., June 2 /PRNewswire-FirstCall/ -- The simple truth about taxes is: the more you plan, the less you pay. That's the key message Gilman Ciocia, Inc. (OTC Bulletin Board: GTAX), a leading provider of tax and financial planning services is conveying to taxpayers as the mid-way point of 2010 nears.

There are perks and some significant tax law changes which may be useful when mapping out tax planning strategies. Here are a few things which may help you to keep more of your hard-earned money when April 15th rolls around again: 

1) Overpayment or underpayment of taxes. Did you receive a big refund last year? If so, you overpaid and the government kept your money as a tax-free loan while you could have invested it and earned interest. Did you owe? A mid-year review will help determine where you are and allow you to adjust your withholding now to avoid penalties later. 

2) Saving for retirement – IRAs, 401(k)s, profit-sharing, pensions, employer-sponsored plans, etc. Many changes have taken place in the last few years regarding retirement savings plans. The plan you originally began with may have been advantageous when you started it, but it might not be anymore. So much has changed with these plans that it's important to review them to see if they are still performing as you intended, and to find out if there are new products available. Many taxpayers do not have an Individual Retirement Account (IRA) and are missing an opportunity to defray their taxes and save for their own future. One of the primary reasons for not having an IRA is not starting one. Begin now, even if it is only a few dollars a paycheck. The government has increased the amounts IRA holders can save, and those over age 50 can place additional catch-up amounts into their IRAs.  

3) Convert your traditional IRA to a Roth - For 2010 and beyond, the $100,000 modified adjusted gross income (AGI) limit on converting a traditional IRA to a Roth IRA has been eliminated. That means you can convert any traditional IRA into a Roth IRA in 2010 regardless of your AGI and pay all of the taxes in 2010 or split the payment between 2011 and 2012. Make sure to speak with a Gilman Ciocia tax advisor regarding Roth IRA conversion opportunities and whether a Roth or Stretch IRA is right for you.

4) Bush tax cuts will expire on January 1, 2011Unless Congress acts, the Bush tax cuts will expire on January 1st, 2011 which would increase income tax rates, increase the long term capital gains tax rate from 15% to 20%, tax dividends at regular income tax rates and increase estate taxes.  Most of the increases would affect middle and upper income earners but even provisions like the child tax credit would decrease from $1000 to $500 unless Congress passes an extension.

5) Estimated tax payments. Adjusting these payments now will avoid underpayment penalties at year-end. 

6) Take advantage of deduction bunching. Some itemized deductions must meet certain thresholds before you can claim them. By being aware of these and managing your expenditures to fall primarily in one year, rather than spread over two years, you may realize significant tax savings. This applies to several expenditures, especially to medical expenses, property tax payments, and charitable donations.  

7) Getting married? Or divorced? These life-changing events have very significant tax implications. A divorce or change in child custody arrangements can mean tax implications in several areas.  

8) Beneficiary designations, powers of attorney, wills, estate planning. Are these working advantageously for you? Do you even have them in place? This is the time to get your plans in order and be sure that tax changes have not changed how you intended these contracts to work. 

9) Buying or selling stocks, bonds, real estate, or other investments. Many tax rules apply to all of these transactions. For example, a real estate like-kind exchange may work to your advantage. If you're selling a residence, perhaps the exclusion for selling a principal residence applies to you. There are capital gains and losses, wash sale rules, long-term gains and losses, and a whole array of other rules when it comes to stocks and bonds. And don't forget, investment expenses count as miscellaneous itemized deductions when used for the production of income. Handling these transactions wisely, rebalancing, and making changes are the name of the game with investments.

"Gilman Ciocia stresses the importance of a mid-year review, where individuals can sit down with a tax and financial planning professional and make any necessary adjustments to their financial portfolio to help lower their taxes in 2011," said Michael Ryan, president and CEO of Gilman Ciocia, Inc. 

Call your tax advisor for your mid-year review soon to discuss your financial plans and learn how you can save on your next tax return.  

About Gilman Ciocia, Inc.

Gilman Ciocia, Inc. is a leading provider of federal, state and local tax preparation services with offices in New York, New Jersey, and Florida.  Founded in 1982, Gilman Ciocia caters to middle and upper income taxpayers who face an increasingly complicated tax code and must choose from a growing array of investment options.  Unlike some tax preparation chains, Gilman Ciocia is open year-round, which affords individuals the opportunity to contact their advisors and ask questions as they arise. Gilman Ciocia is a member of the National Association of Tax Professionals and is recognized among the Top 40 accounting firms nationwide in 2006 by Accounting Today Magazine.  Visit or call 1-800-TAX-TEAM for more information and to find the office closest to you.  Securities offered through Prime Capital Services, Inc.  Member FINRA/SIPC.  Gilman Ciocia and Prime Capital Services, Inc. are affiliated entities. Neither offers legal advice. 

Source of information: © National Association of Tax Professionals.   


Chris Clews

Director of Marketing


SOURCE Gilman Ciocia, Inc.