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April 2014

April is tax filing time

Tuesday, April 15, is the deadline for filing certain returns and taking certain tax-related actions. Here are the major deadlines.

Pay attention to your MAGI to qualify for tax breaks

Take a look at your 2013 tax return after it’s prepared. How close to the edge did you come to losing tax benefits due to tax phase-outs? As you begin your 2014 tax planning, consider the effects of these benefit-limiting provisions, many of which are based on modified adjusted gross income, or MAGI. Knowing how close you are to the “edge” can help you preserve tax breaks for 2014.

A caution: Since the definition of MAGI as applicable to individual phase-outs varies, you might have to choose between conflicting opportunities. For instance, if you have a child in college this semester, the American Opportunity Credit and the Lifetime Learning Credit may be on your mind. Both benefits are education-related, yet the qualifying requirements differ – including the MAGI threshold.

Financial tips for the 20-something generation

The earlier you start, the easier it will be to get ahead financially. Here are some recommendations for those in their early twenties.

Pay yourself first. Every time you get paid, put something aside in a savings or investment account. As a general rule, save 10% of your income. Even smaller amounts add up over time.

Watch your plastic. Credit cards are an expensive form of debt, and it’s easy to lose control of them. Try to pay your entire credit balance every month, even if it’s a stretch. If you’ve been carrying a balance, buy nothing more on credit until the balance is zero.

Keep a clean credit record. If you plan to own a home, buy a car, or start a business, you’re going to need squeaky-clean credit. Keep all of your financial obligations current, and never make a financial commitment that you can’t keep. If you fall behind on any obligation, talk to the creditor immediately to make alternative arrangements.

Make sure you have adequate medical coverage. You may not see a doctor even once this year. But if you do need medical care, it could be for something serious and expensive. Anything less than a good major medical policy could ruin you financially.

Watch your expenses. At this point in your career, you may not receive large or frequent pay raises, but you can achieve the same effect by cutting expenses. Shop before you buy. Very similar – and sometimes identical products – are sold at widely varying prices. Wise shopping can be the equivalent of having a good-paying second job.

For assistance with financial strategies suitable for your particular age and situation, give us a call.


This newsletter provides business, financial, and tax information to clients and friends of our firm. This general information should not be acted upon without first determining its application to your specific situation. For further details on any article, please contact us.

References, Citations, and Suggested Additional Readings
for Material in the April 2014 Monthly Newsletter

We thought you would appreciate having references, citations, and additional reading sources on topics in each issue of the Monthly Newsletter.

Article: “Pay attention to your MAGI to qualify for tax breaks”
– Rev. Proc. 2013-35.

– IR-2013-86.