ACCELERATING AND DEFERRING
Normally, taxpayers are advised to try to postpone income and accelerate deductions. In an environment, however, of anticipated higher rates in the following year, 2012 is a year to consider the opposite strategy. Accelerate income to get it taxed at the lower rates of 2012, and postpone deductions so they can offset income in 2013 that would otherwise be taxed at a higher rate than 2012 income.
One of the provisions that expired at the end of 2011 was the provision permitting taxpayers over age 70-1/2 to make IRA distributions directly to charity and avoid taking those distributions into income. Taxpayers who have taken advantage of this strategy in the past and who would like to do so also for 2012 should try to postpone required minimum distributions until after the November elections to see if Congress acts to retroactively extend the provision.
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