"Surprises Are for Birthdays, not Tax Time" Is Message of Mid-Year Tax Savings Report from Gerber & Co. CPAs

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"Surprises Are for Birthdays, not Tax Time" Is
Message of Mid-Year Tax Savings Report from
Gerber Co. CPAs
(1888PressRelease) In the Mid-Year Tax Savings
Report, Gerber Co. CPA's principals stress the
importance of taxpayers reviewing their 2012/2013
tax situation now to avoid paying unnecessary
taxes due to the ever-changing tax code. Los
Angeles - In Gerber Co. CPAs' recently released
Mid-Year Tax Savings Report, the firm's
principals stress the importance of taxpayers
reviewing their 2012/2013 tax situation now to
avoid paying unnecessary taxes due to the
ever-changing tax code. "'Surprises are for
birthdays, not tax time' encapsulates our advice
to our clients as we approach the mid-point of
2012," said Jonathan Gerber, managing director of
Gerber Co. CPAs. "New tax rules every year has
become a given, but 2012 will be more complex as
the expiration date for Bush-era tax cuts is
December 31." Taxpayers who review their tax
situation six months before the end of the year
will have the time to plan for various scenarios,
which is especially important with an economy
struggling to recover as well as uncertainty
about what Congress will do and the outcome of
the 2012 elections. A vital element of such
planning is to look at 2012 and 2013 together if
taxpayers expect to reduce the tax they'll owe
for both years to the very minimum. According
to the Mid-Year Tax Savings Report from Gerber
Co., three review strategies to be considered are
controlling taxes on investments, managing the
tax bracket and timing deductions for maximum
benefit. For example, taxpayers may want to be
prepared for the scenario of the Bush-era tax
cuts not being renewed, which would increase
capital gains from 15 percent to 20 percent. In
that case, taking any possible gains before the
end of 2012 may be prudent since the tax rate
would be lower. Gerber says taxpayers can have
some control over their tax bracket by making
maximum contributions to their retirement plans
with pre-tax dollars. He adds that a very good
reason for reviewing 2012 and 2013 taxes now is
the opportunity to "bunch" expenses. State income
taxes, routine health care and charitable
contributions are just three of the many expenses
that could be advantageous to pay during 2012, or
conversely delay until 2013. It all depends on
each individual taxpayer's unique situation.
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Gerber Co.'s Mid-Year Tax Savings Report also
arms taxpayers with an overview of the major tax
changes for 2012, including the potential
expiration of the Bush-era tax cuts. For example,
the top tax bracket will increase from 35 percent
to 39.6 percent the marriage penalty will
increase and the estate tax exemption will be
cut from 5,120,000 to 1 million. Other
significant tax changes include the end of the
two-percent payroll tax cut for employees. Of the
various tax extenders that will also expire,
businesses will lose the RD tax credit,
students/families will no longer be able to
deduct as much as 4,000 for higher-education
expenses, and contributions to charities from
IRAs will no longer be tax-free. "We also
address the tax situation of businesses in our
Mid-Year Tax Savings Report," said Michael Stone,
founding director of Gerber Co. CPAs. "Business
owners also deserve to experience 'surprises on
their birthdays, and not at tax time.' Many
business owners may be surprised to learn that
reducing their business income tax may have a
more beneficial financial impact than increasing
sales or lowering costs." Stone further
explained that a business retains the total
amount of taxes saved. Whether a business
generates more profits or cuts overhead, some
portion of it will be paid in taxes. This
business tax-savings strategy is even more
significant for companies with a low-profit
margin, compared to those operating at a higher
margin. Another important element of mid-year
tax planning for business owners and families in
general is their children's summer jobs. Most
teenagers will become employees and have taxes
withheld from their pay however, some may choose
to mow lawns or offer similar services that would
categorize them as self-employed. Parents can
provide their teens with an excellent financial
lesson by discussing the differences and making
the right choices together.
Hiring children to work in family-owned
businesses may be a tax-savings advantage for
parents. Their child's income is tax-deductible
to the business, as with any wages, and income
the parents may have had to pay at a higher tax
bracket is now paid to the child who will be at a
lower tax bracket. The same strategy could reduce
or even eliminate the kiddie tax, as it relates
to college-aged children.
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"The wisdom of mid-year tax planning can't be
overemphasized," said Gerber. "Taxpayers will
gain greater peace of mind for the remainder of
the year, won't be harried and hurried at the end
of the year and will have tax plans in place.
After 12/31 it's all post-mortem and almost all
planning options are off the table. In addition,
cash needs for taxes can be anticipated and
planned for in advance." Visit www.GerberCo.com
for more information. The suggestions in this
press release and the Gerber Co. CPAs Mid-Year
Tax Savings Report are for general information
purposes. Taxpayers should seek the advice of a
certified CPA to determine the best tax planning
for their unique situation. About Gerber Co.
CPAs Opened in 1986, Gerber Co. CPAs serves
the financial needs of family businesses and
high-net-worth individuals with tax, family
office, audit, attest and forensic accounting
services. The firm has grown to become an
Independent Alliance Member of BDO Seidman, the
5th largest CPA group in the world. The Los
Angeles Business Journal named Gerber Co. one
of the top LA accounting firms in 2012. Visit
www.GerberCo.com for more information. Source ht
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