Unlike last year, tax planning for 2013 is not hampered by uncertainties over alooming fiscal cliff. Unfortunately, there is always some uncertainty and a few expiring provisions to warrant special attention by taxpayers.

Managing income taxes at year end involves techniques designed to address three issues:

· Accelerating or deferring income: If a taxpayer expects to be in the same or a lower tax bracket next year, it's best to defer as much income as possible until after the yearend.
· Accelerating or deferring deductions: If a taxpayer's overall tax rate is the same in both years, accelerating deductions achieves tax savings this year rather than waiting for those tax savings to materialize next year.
· Take advantage of tax provisions scheduled to expire at the end of 2013. There are several temporary tax provisions which can only be used this year.

Tax planning begins by projecting income and deductions for the year to determine your tax bracket and income thresholds that trigger higher and/or additional taxes, or limits the effectiveness of deductions.  One of the impacts of the American Taxpayer Relief Act of 2012 (ATRA12)is the reintroduction of the Pease limitation, which can greatly limit itemized deductions.  Once a taxpayer knows what his or her income taxes will look like, it's time to evaluate which techniques will help the most.

Strategies to accelerate or defer income:

· Adjust your elective deferral plans at work: Taxpayers who participate in 401(k), 403(b), most 457 plans, or in the Thrift Savings Plan can defer up to $17,500 this year.  Taxpayers age 50 and older can defer up to $23,000.
· Harvest capital gains or losses: Long-term capital gains are taxed at 0 percent for taxpayers in the 15 percent bracket.  Capital losses can be used to offset capital gains and reduce other income up to $3,000.
· Use the IRA. Taxpayers age 59 ½ and older can accelerate IRA distributions in 2013.  Contributions may be deductible depending on your income level and whether you're covered by a retirement plan through work. Taxpayers under age 59½ can convert traditional IRAs to Roth IRAs to accelerate income.
· Health-care assistance: People with health savings accounts - available with some high-deductible health insurance policies -- can save up to $3,250 tax-deferred for an individual and $6,450 for a family.Those who are55 and older can save an additional $1,000.  Flex spending contribution limits are capped at $2,500 this year.

Strategies to accelerate or defer deductions:

· Medical expenses: The Affordable Care Act (ACA) raises the income threshold this year to 10 percent of adjusted gross income for taxpayers under age 65.  The threshold remains at 7.5 percent for those 65 and older.  Taxpayers may need to prepare or defer medical bills to lump expenses in a single year to get the deduction.
· Gifts to charities: Use a donor advised fund (DAF) to maximize the tax savings from charitable giving.   A DAF makes gifting appreciated securities easier.  The DAF can be funded in tax years when the deduction will have the most impact.  Distribution to charities can be made at any time without tax consideration. 
· Qualified Charitable Distribution: This year only, taxpayers age 70½ or older can choose to direct up to $100,000 of their IRA-required minimum distribution to charity.  By doing so, the distribution does not show up as taxable income, which can lower taxation of Social Security benefits and help reduce other threshold levels to further minimize taxes.

ATRA12 extended?but did not make permanent?several tax incentives for individuals.Taxpayers should consider whether they can benefit from these incentives this year and plan accordingly.  The following provisions are set to expire on Dec. 31 unless extended again:

· State and local sales taxes deduction.  Taxpayer can choose between deducting state and local income taxes or the sales taxes they've paid through the year.
· Deduction for teacher expenses. Eligible educators can deduct up to $250 of any unreimbursed expenses.
· Deduction of mortgage insurance premiums. Payments of Private Mortgage Insurance premiums can be treated as deductible home mortgage interest in 2013.
· Discharge of principal residence indebtedness. This can be excluded from gross income this year.
· Qualified Charitable Distribution. Taxpayers can make tax-free charitable donations from their required IRA distributions.

2013 is certainly an exciting year for tax planning. Start now in order to minimize your tax bill in April. 

About Rick Rodgers: Certified Financial Planner® Rick Rodgers is president of Rodgers & Associates, "The Retirement Specialists," in Lancaster, Pa., and author of "The New Three-Legged Stool: A Tax Efficient Approach to Retirement Planning." He's a Certified Retirement Counselor and member of the National Association of Personal Financial Advisers. Rodgers has been featured on national radio and TV shows, including "FOX Business News" and "The 700 Club," and is available to speak at conferences and corporate events (www.RodgersSpeaks.com).

Midwestern farmers are continually challenged by the need to feed a growing world while protecting and conserving our natural resources. However, the Midwest has an advantage compared to other regions of the United States due to our good soils, adequate rainfall, and intensive animal production systems. Livestock manure not only provides nutrients for crop production, but also helps to improve soil quality.

The most overlooked value of manure is its ability to improve soil bulk density, aggregation, organic matter, and biological activity. "The increase in soil microbial activity provides the foundation for the increase in organic matter in the soil," says Dr. Jerry Hatfield, Director of the Laboratory for Agriculture and the Environment at ISU. "Organic matter increases are necessary for any improvement in soil quality and continual soil biological activity is needed as the sustaining factor in providing the mechanism for incorporating manure into a valuable soil resource."

Hatfield's team used on-farm evaluations of manure management to demonstrate that the combination of reducing tillage by utilizing strip tillage systems as a method of incorporating liquid manure greatly improved soil quality. The increased aggregate stability increases the infiltration rate of rainfall into the soil and also decreases the potential for soil erosion.

The value of manure cannot be overlooked and Midwestern agricultural systems have the potential to become more efficient in the utilization of the natural resources, e.g., water, nutrients, and light, with the incorporation of manure as part of the management system. Improvement of soil quality provides the foundation for enhanced crop production and resilience to climate variability.

Hatfield's project will be featured at the upcoming Driftless Region Beef conference Jan. 30 and 31, 2014, in Dubuque, Iowa. Several of the speakers will focus on the competitive advantage of integrating beef production and cropping systems in the upper Midwest.

The conference will begin at 1 p.m. on Jan. 30 and continue through 11:45 a.m. on Jan.31. Thursday's afternoon program will focus on the competitive advantage of grain and beef production systems, with an evening discussion focused on extending the grazing season with cover crops and annuals. Friday morning's program includes three breakout sessions for feedlot operations and three for cow-calf producers.

Registration for the conference is $80 before Jan. 15 or $100 after Jan. 15. Additional information about the conference is available at www.aep.iastate.edu/beef . Registration will open for the conference on Dec. 1.

The Driftless Region Beef Conference is sponsored by the University of Illinois Extension, Iowa State University Extension and Outreach, the University of Minnesota Extension, and University of Wisconsin Extension. The planning team strives to deliver the latest in research-based information regarding the beef cattle industry. For more information or to receive a brochure, contact Denise Schwab at 319-721-9624.

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