Planning now for April’s tax return
It’s not too soon to look at what you will owe for your 2014 taxes. Two basic questions: will any life changes—marriage, divorce, another child, a new job—affect your tax picture? And, if you got a big refund last year or owed a lot, should you change your tax withholding with a new W-4?
If you have a large capital gain, are there investment losses you can reap to balance some of the gain? Have you paid enough estimated taxes on the gain to avoid a penalty?
Make sure you have contributed to any tax-advantaged retirement accounts, at least enough to earn an employer’s match. Maximize contributions where you can. Take advantage of extra allowances for those born before 1961. Check to see if converting to a Roth IRA is worthwhile for you. Plan your deductions to increase their value. It may be worthwhile to bunch two years’ worth of certain write-offs where you can.
For nearly 30 years, Mike Nickerson has owned and managed a small, full-service accounting practice in the Midcoast. He holds a bachelor's degree in accounting from University of Southern Main and a master's degree in financial planning from Bentley University.
He is a past board member and president of the Maine Society of Certified Public Accountants and currently serves on the Maine Board of Accountancy.
An aged rock musician, Nickerson now finds musical enjoyment playing upright and electric bass in a variety of bands spanning folk to jazz music genres. He and his wife have three grown children, and they enjoy their free time hiking, kayaking, golfing, bicycling and motorcycling.
