Indiana tax professionals say there are some changes Hoosiers can make to lower the burden going over the so-called fiscal cliff might put on them, but there’s scant time left to make them.
“Up till now we’ve been saying go ahead and sell your stocks off – if you’re planning on selling them in the next year, go ahead and get rid of those, because you’ll have them at the lower tax bracket for this year if you do it. But at this point, I’m not sure there’s a lot of time left to do that,” says Lori Carpenter, who works for tax advising service Stadler and Company. She says it’s important to focus on the fact tax rates are set to increase.
If Congress does fail to come to a deal, Carpenter says there are ways to shield income from being taxed in 2013, too.
“Go ahead and convert into 401k, put their money into IRA at maximum limits,” Carpenter says. “There are some educational places you can put your money for your children that give you some tax benefit; your charitable contributions. Those types of things can really help to bring down your taxable income.”
Analysts at the Indiana Business Research Center say the state itself may not be affected by the cliff as much as some other states with more ties to the federal government, but Carpenter notes taxes will go up as much as ten percent for all Hoosiers – regardless of income level – if a bargain isn’t struck by midnight.