Personal Finance

Taxes 2014: Why Your Year-End Tax Planning Hinges on 1 Key Decision

As the end of the year approaches, many people are scurrying to make year-end tax moves to minimize their bills in the coming tax season. But a lot of the advice taxpayers receive will be useless if they don't know about a key decision they'll have to make when filing their returns next year.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at the key decision of whether to itemize deductions or take a standard deduction on your return. Dan notes that most year-end advice hinges on reducing your taxable income, with suggestions that include making gifts to charity, paying state and local taxes early, and prepaying medical expenses and other deductible costs. But as Dan points out, most of these deductions are only allowable if you itemize, making them essentially worthless if you take a standard deduction. Dan concludes by going through the 2013 standard deductions of $6,100 for single filers and $12,200 for married couples and running the numbers to help you make the decision about when you should itemize.

Know your taxes for 2014

Being smart about itemizing or taking the standard deduction is just one way you can cut your tax bill to Uncle Sam. In our brand-new special report " How You Can Fight Back Against Higher Taxes How You Can Fight Back Against Higher Taxes," The Motley Fool's tax experts run through what to watch out for in doing your tax planning this year. With its concrete advice on how to cut taxes for decades to come, you won't want to miss out. Click here Click here to get your copy today -- it's absolutely free.

Neither the Motley Fool nor Fool contributor Dan Caplinger has any position in any stocks mentioned. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics


The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More