Tuesday, July 11, 2017

Tax Deductions for College Expenses

As a parent of a college-age child, your goal is to pay for current or imminent college bills. We would like to address this concern by suggesting several approaches that seek to take maximum advantage of tax benefits to minimize your expenses. (Please note that the following suggestions are strictly related to tax benefits. You may have non-tax-related concerns that make the suggestions inappropriate.)
Tuition tax credits. You can take an American Opportunity tax credit (AOTC) of up to $2,500 per student for the first four years of college-a 100% credit for the first $2,000 in tuition, fees, and books, and a 25% credit for the second $2,000. You can take a Lifetime Learning credit of up to $2,000 per family for every additional year of college or graduate school-a 20% credit for up to $10,000 in tuition and fees.
Both credits are phased out for higher-income taxpayers. The American Opportunity tax credit is phased out for couples with income between $160,000 and $180,000, and for singles with income between $80,000 and $90,000. The Lifetime Learning credit is phased out (for 2017) for couples with income between $112,000 and $132,000, and for singles with income between $56,000 and $66,000. The phase-out range for the Lifetime Learning credit is adjusted annually for inflation.
Only one credit can be claimed for the same student in any given year.
Statement from institution required before tuition credits or qualified tuition deduction can be claimed. To claim the tuition tax credits, a taxpayer must receive a Form 1098-T payee statement from the educational institution. For purposes of this requirement, if a person the taxpayer claims as a dependent receives the Form 1098-T, the statement is treated as received by the taxpayer.
Scholarships. Scholarships are exempt from income tax, if certain conditions are satisfied. The most important are that the scholarship must not be compensation for services, and it must be used for tuition, fees, books, supplies, and similar items (and not for room and board).  Scholarships used for room and board would be taxable to the student.
Although a scholarship is tax-free, it will reduce the amount of expenses that may be taken into account in computing the American Opportunity and Lifetime Learning credits, above, and may therefore reduce or eliminate those credits.
Employer educational assistance programs. If your employer pays your child's college expenses, the payment is a fringe benefit to you, and is taxable to you as compensation, unless the payment is part of a scholarship program that's "outside of the pattern of employment." Then the payment will be treated as a scholarship (if the other requirements for scholarships are satisfied).
Tuition reduction plans for employees of educational institutions. Tax-exempt educational institutions sometimes provide tuition reductions for their employees' children who attend that educational institution, or cash tuition payments for children who attend other educational institutions. If certain requirements are satisfied, these tuition reductions are exempt from income tax.
College expense payments by grandparents and others. If someone other than you pays your child's college expenses, the person making the payments is generally subject to the gift tax, to the extent the payments and other gifts to the child by that person exceed the regular annual (per donee) gift tax exclusion of $14,000 for 2017. Married donors who consent to split gifts may exclude gifts of up to $28,000 for 2017.
However, if the other person pays your child's school tuition directly to an educational institution, there's an unlimited exclusion from the gift tax for the payment. The relationship between the person paying the tuition and the person on whose behalf the payments are made is irrelevant.
The unlimited gift tax exclusion applies only to direct tuition costs. There's no exclusion (beyond the normal annual exclusion) for dormitory fees, board, books, supplies, etc. Prepaid tuition payments may qualify for the unlimited gift tax exclusion under certain circumstances.
Student loans. You can deduct interest on qualifying loans used to pay for college education expenses. The maximum deduction is $2,500. However, the deduction phases out for taxpayers who are married filing jointly with AGI between $135,000 and $165,000 (between $65,000 and $80,000 for single filers).
Bank loans. In order to take the student loan interest deduction, the loan must be a “qualifying” student loan.  Therefore, interest on non-qualifying bank student loans will be nondeductible. However, if you use a home equity loan, the interest is deductible for regular income tax purposes (although not for alternative minimum tax purposes). Interest on home equity debt would be reported on Schedule A.
Borrowing against retirement plan accounts. Many company retirement plans permit participants to borrow cash. This option may be an attractive alternative to a bank loan, especially if your other debt burden is high. However, the loan must carry an interest rate equal to the prevailing commercial rate for similar loans, and, unless you qualify for the deduction for education loan interest (described above), there's no deduction for the personal interest paid. Moreover, unless strict requirements are satisfied, a loan against a retirement account is treated as a premature distribution (withdrawal) that's subject to regular income tax and an additional penalty tax.
Withdrawals from retirement plan accounts. IRAs and qualified retirement plans represent the largest cash resource of many taxpayers. You can pull money out of your IRA (including a Roth IRA) at any time to pay college costs without incurring the 10% early withdrawal penalty that usually applies to withdrawals from an IRA before age 59½. However, the distributions are subject to tax under the usual rules for IRA distributions.
Not all of the above breaks may be used in the same year, and use of some of them reduces the amounts that qualify for other breaks. So it takes planning to determine which should be used in any given situation. If you would like to discuss one or more of the above payment possibilities, or any other alternatives, in more detail, please contact us.

Monday, June 12, 2017

Planning for College Expenses

As a parent with college-bound children, you are concerned with setting up a financial plan to fund future college costs. We would like to address this concern by suggesting several approaches that seek to take maximum advantage of tax benefits to minimize your expenses. (Please note that the following suggestions are strictly related to tax benefits. You may have non-tax-related concerns that make the suggestions inappropriate.)
 
In some cases, transferring ownership of assets to children can save taxes. You and your spouse can transfer up to $28,000 (in 2017) in cash or assets to each child with no gift tax consequences. And if your child isn't subject to the "kiddie tax," he or she is taxed on income from assets entirely at his or her lower tax rates-as low as 10% (or 0% for long-term capital gain).
 
However, where the kiddie tax applies, the child's investment income above $2,100 (for 2017) is taxed at your tax rates and not the child's rates. The kiddie tax applies if: (1) the child hasn't reached age 18 before the close of the tax year or (2) the child's earned income doesn't exceed one-half of his or her support and the child is age 18 or is a full-time student age 19 to 23.
 
A variety of trusts or custodial arrangements can be used to place assets in your children's names. Note, it's not enough just to transfer the income, e.g., dividend checks, to your children. The income would still be taxed to you. You must transfer the asset that generates the income to their names.
 
Tax-exempt bonds. Another way to achieve economic growth while avoiding tax is simply to invest in tax-exempt bonds or bond funds. Interest rates and degree of risk vary on these, so care must be taken in selecting your particular investment. Some tax-exempts are sold at a deep discount from face and don't carry interest coupons. Many are marketed as college savings bonds. A small investment in these so-called zero coupon bonds can grow into a fairly sizable fund by the time your child reaches college age. "Stripped" municipal bonds (munis) provide similar advantages.
 
Series EE U.S. savings bonds. Series EE U.S. savings bonds offer two tax-savings opportunities when used to finance your child's college expenses: first, you don't have to report the interest on the bonds for federal tax purposes until the bonds are actually cashed in; and second, interest on "qualified" Series EE (and Series I) bonds may be exempt from federal tax if the bond proceeds are used for qualified college expenses.
 
To qualify for the tax exemption for college use, you must purchase the bonds in your own name (not the child's) or jointly with your spouse. The proceeds must be used for tuition, fees, etc., not room and board. If only part of the proceeds are used for qualified expenses, then only that part of the interest is exempt.
 
If your adjusted gross income (AGI) exceeds certain amounts, the exemption is phased out. For bonds cashed in during 2017, the exemption begins to phase out when joint AGI hits $117,250 for joint return filers ($78,150 for all other returns) and is completely phased out if your AGI is at $147,250 ($93,150 for all other returns).
 
Qualified tuition programs. A qualified tuition program (also known as a 529 plan) allows you to buy tuition credits for a child or make contributions to an account set up to meet a child's future higher education expenses. Qualified tuition programs can be established by state governments or by private education institutions.
 
Contributions to these programs aren't deductible. The contributions are treated as taxable gifts to the child, but they are eligible for the annual gift tax exclusion ($14,000 for 2017). A donor who contributes more than the annual exclusion limit for the year can elect to treat the gift as if it were spread out over a five-year period.
 
The earnings on the contributions accumulate tax-free until the college costs are paid from the funds. Distributions from qualified tuition programs are tax-free to the extent the funds are used to pay qualified higher education expenses. Distributions of earnings that aren't used for qualified higher education expenses will be subject to income tax plus a 10% penalty tax.
 
Coverdell education savings accounts. You can establish Coverdell ESAs (formerly called education IRAs) and make contributions of up to $2,000 for each child under age 18. This age limitation doesn't apply to a beneficiary with special needs, defined as an individual who because of a physical, mental or emotional condition, including learning disability, requires additional time to complete his or her education.
 
The right to make these contributions begins to phase out once your AGI is over $190,000 on a joint return ($95,000 for singles). If the income limitation is a problem, the child can make a contribution to his or her own account.
 
Although the contributions aren't deductible, income in the account isn't taxed, and distributions are tax-free if spent on qualified education expenses. If the child doesn't attend college, the money must be withdrawn when the child turns 30, and any earnings will be subject to tax and penalty, but unused funds can be transferred tax-free to a Coverdell ESA of another member of the child's family who hasn't reached age 30. These requirements that the child or member of the child's family not have reached 30 do not apply to an individual with special needs.
 
The above are just some of the tax-favored ways to build up a college fund for your children. If you wish to discuss any of them, or other alternatives, please contact us.

Friday, May 12, 2017

Adjusting your income tax withholding


If you typically receive a large refund from IRS after you file your income tax return, or you owe the IRS a substantial amount at that time, you should consider adjusting your income tax withholding.

Your employer withholds income tax from your paycheck based on the number of withholding allowances you claim on Form W-4, Employee's Withholding Allowance Certificate. You must give your employer a Form W-4 when you first begin work.

If your tax circumstances change, it's up to you to give your employer a new W-4. Many employees neglect to take this step, resulting in withholding that is either too high or too low.

If your withholding is too high, you are in effect giving the government an interest-free loan. Although the overpaid tax will be refunded once you file your return, you would have been better off using the money during the year to generate income or for personal purposes. In this case, you should reduce the amount your employer withholds to increase your regular take-home pay.

At the other extreme are taxpayers who have too little withheld and who owe substantial amounts come April 15th. While they enjoy the "extra" amounts received in each paycheck, they must pay back the taxes owed in April, and will likely be tacking on extra in the form of penalties. If this is your situation, you should increase your withholding. As a rough guideline, you should owe less than 10% of your tax bill come April.

Even if you have had too little tax withheld for most of the year, you still may be able to avoid a penalty by asking your employer to withhold additional amounts for the rest of the year. This is because the increased withholding at year's end will be treated as paid equally throughout the year.

You should check your withholding whenever significant personal or financial changes occur in your life, including the following:
 
       Changes in filing status or exemptions: You get married or divorced; you have a new child; a child goes off on his or her own.

       Changes in wage income: You or your spouse start or stop working, or start or stop a second job.

       Changes in income not subject to withholding: You have an increase or decrease in rental income, interest income, dividends, capital gains, or IRA distributions.

       Changes in deductions and credits: You take out or pay off a mortgage; you become entitled to the dependent care credit, child tax credit, or the higher education credit; you have changes in medical, alimony, or job expenses.

       Changes in other taxes: You owe self-employment tax or employment taxes for your household workers.

Unfortunately, the procedures for arriving at the proper withholding amounts are among the more complex ones taxpayers confront. A wide array of factors play a role: exemptions, deductions, credits, marital status, your spouse's income, and others. The Form W-4 includes three worksheets that you may have to complete to determine the proper withholding. If you think your situation calls for a withholding adjustment (up or down), and you would like some guidance in getting through this maze, please contact us 

Tuesday, April 18, 2017

Deductibility of Job-Search Expenses

If you or someone in your family is looking for a new job, you should be aware of the income tax deduction that may be available with respect to job-search costs. Qualifying expenses are deductible even if they don't result in a new position being offered or accepted.

 What are job hunting expenses?  Expenses of seeking new employment can encompass a broad range of items. Some of the more common expenses for which deductions have been allowed are:
·         the cost of resumes, including postage for sending them to prospective employers;
·         job counselling and referral fees;
·         employment agency fees;
·         telephone charges related to seeking new employment;
·         local as well as out-of-town travel for interviews, to the extent not reimbursed by the prospective employer.

 Nondeductible items include a loss incurred on forfeiture of a deposit for a home in an area where a new job was anticipated, and a real estate broker's commission on the sale of a home in connection with a move to a new job location.

For job-search expenses to be deductible, you must be looking for employment in the same trade or business in which you are engaged. For this purpose, a corporation's secretary-treasurer seeking a position as assistant to the vice president of finance at another corporation was seeking employment in the same trade or business. But an artist seeking work in the business end of the art field was held to be looking for a job in a new trade or business. The IRS also says any job in the private sector is a new trade or business for a retired military officer.

 Accepting temporary employment in another line of work won't affect your deduction for expenses in searching for permanent employment in your regular line of work. But job hunting costs aren't deductible if you are looking for a job in a new trade or business, even if you find employment as a result of the search.

First time job seekers. The IRS says that job hunting expenses incurred in seeking employment for the first time are not deductible. This rule can be tough on students and others entering the job market for the first time. But it may be possible to avoid the impact of this rule through an internship or other employment during the student's senior year. In addition to looking good on a resume, this type of work experience can be a trade or business in which the student is engaged (thus avoiding the first time job seeking rule).

 Reentry into job market. If an individual is temporarily unemployed, expenses of seeking employment in the field in which he or she was previously employed are deductible. But the IRS takes the position that if there is a substantial time break between earlier employment and the current search, you cannot deduct the expenses of looking for a job. Thus, if there has been a gap of several years since the last employment, for example, to take care of small children or to return to school to pursue post-graduate studies, the cost of seeking employment is not deductible.

 Other limitations on deductibility. Deductible expenses in seeking employment are claimed as miscellaneous itemized deductions. As a result, individuals who take the standard deduction cannot claim such expenses. In addition, miscellaneous itemized deductions are deductible only to the extent that, in the aggregate, they exceed 2% of your adjusted gross income. Thus, unless your job hunting costs are large or you have other significant miscellaneous deductions, you may not be able to derive any tax benefit from these expenses.

 We hope that this overview of the tax treatment of job search expenses is helpful. If you have any specific questions, or need additional information regarding this or other tax related matters, please contact us.

Saturday, March 11, 2017

The "Kiddie Tax"


Wondering how you can save taxes by transferring assets into your children's names?

This tax technique is called income shifting. It seeks to take income out of your higher tax bracket and place it in the lower tax brackets of your children. While some tax savings are available through this approach, the "kiddie tax" rules impose substantial limitations on it if:

1.     the child hasn't reached age 18 before the close of the tax year, or

2.     the child's earned income doesn't exceed one-half of his support and the child is age 18 or is a full-time student age 19 to 23.

The kiddie tax rules apply to your children who are under the above-described cutoff age, and who have more than a set amount of unearned (investment) income for the tax year-$2,100 for 2016 or 2015. Essentially, these rules tax the child's investment income above this amount (called "net unearned income") at the parents' (higher) tax rate. While some tax savings on up to $2,100 of income for 2016 or 2015 can still be achieved by shifting income to children under the cutoff age, the savings aren't substantial.

The following example shows how the kiddie tax rules work. Note that, under the regular tax rules, for 2016 a dependent child cannot claim a personal exemption and is limited to a standard deduction of $1,050 (unless his "earned" income, e.g., from a job, plus $350, exceeds that amount).

Example. For 2016, Mr. and Mrs. Smith are in the 25% federal income tax bracket. That is, they would pay $25 in additional tax on every $100 of additional income. The couple are the parents of a 12-year-old son, Tommy, to whom they transfer a $22,000 bond that pays 10%. Tommy therefore receives $2,200 of investment income. He has no other income.

Had the parents kept the bond, they would have paid $550 in tax on the interest ($2,200 × 25%). Tommy, instead, is taxed on $1,150 of taxable income-$2,200 of gross income reduced by his $1,050 standard deduction-as follows. His "net unearned income" is $100 (the excess of his interest income above $2,100). This part of his taxable income is taxed at 25%, for a tax of $25 ($100 × 25%). The rest of Tommy's taxable income, $1,050 ($1,150 − $100) is taxed at his 10% tax rate, for a tax of $105. Tommy's total tax is thus $130 ($25 + $105). Since the parents would have paid $525 on the interest income, the family saves $420 via the tax move.

If Tommy were 19 or older or, if a student, 24 or older, all of his taxable income would be taxed at his own 10% rate. His tax bill on his $1,150 of taxable income would be $115 ($1,150 × 10%). An additional savings of $15.

Note that, to transfer income to a child, you must actually transfer ownership of the asset producing the income: you cannot merely transfer the income itself. In the above example, the parents were careful to give the child the ownership of the bond itself and didn't merely assign the interest payments to him. Property can be transferred to minor children using custodial accounts under the state Uniform Gifts or Transfers to Minors Acts.

The portion of investment income of a child that is taxed at the parents' tax rates under the kiddie tax rules may be reduced or eliminated if the child's investments produce little or no current taxable income. Such investments include:

·         securities and mutual funds oriented toward capital growth that produce little or no current income;

·         vacant land expected to appreciate in value;

·         stock in a closely-held family business, expected to become more valuable as the family business expands, but which pays little or no cash dividends;

·         tax-exempt municipal bonds and bond funds;

·         U.S. Series EE bonds, for which recognition of income can be deferred until the bonds mature, the bonds are cashed in, or an election to recognize income annually is made.

Investments that produce no taxable income-and which are therefore not subject to the kiddie tax-also include tax-advantaged savings vehicles such as:

·         traditional and Roth individual retirement accounts (IRAs and Roth IRAs), which can be established or contributed to if the child has earned income;

·         qualified tuition programs (QTPs, also known as "529 plans"); and

·         Coverdell education savings accounts ("CESAs").

A child's earned income (as opposed to investment income) is taxed at the child's (not the parents') tax rates, regardless of amount. Therefore, to save taxes within the family, consider employing the child and paying reasonable compensation. This is particularly appropriate if you have your own business, but can be done even if you don't.

Where the kiddie tax applies, it's computed and reported on Form 8615, which is attached to the child's Form 1040.

Parents can elect to include the child's income on their own return, if certain requirements are satisfied. This avoids the need for a separate return for the child, but, generally, doesn't change the tax on the child's unearned income, which is still taxed at the parents' tax rate. However, it's important to consider that the addition of the child's income to the parent's adjusted gross income may affect the various floors and ceilings for, and therefore the amounts of, the parents' deductions and limitations.

The election to include a child's income on the parents' return is made, and the additional taxes resulting to the parents are computed and reported, on Form 8814.
 
If you have any questions on the kiddie tax or would like to discuss the tax ramifications of transferring assets into your children’s names, please contact us.

Saturday, February 11, 2017

Miscellaneous Itemized Deductions

There are types of expenses classified as a "miscellaneous itemized deductions," which may result in a tax deduction for you if you itemize your deductions, depending on your adjusted gross income (AGI) and the total of all your miscellaneous items.
 
First, you compute your total of all expenses that fall into the miscellaneous deduction categories. This amount is deductible as an itemized deduction but only if (and to the extent) it is greater than 2% of your AGI. Note that since it is an itemized deduction, it can only be claimed if you itemize your deductions and don't claim the standard deduction.
 
Example. Jerry's AGI is $75,000. His miscellaneous itemized deductions total $2,000. If he itemizes deductions, he can claim a $500 deduction for his miscellaneous items: $2,000 − $1,500 (2% of $75,000).
 
What are miscellaneous itemized deductions? The following are itemized deductions subject, in total, to the 2% rule described above:
  1. Tax return preparation costs. This category includes the fee to have your tax return prepared as well as other costs related to determining your taxes, such as appraisal costs or legal fees.
  2. Employment-related expenses of an employee other than those reimbursed under an arrangement that meets special requirements. If you incur deductible expenses in connection with your employment, they are miscellaneous deduction items. These include out-of-pocket expenses for which you aren't reimbursed by your employer. They also include expenses for which you are reimbursed or are paid an expense allowance but not under an arrangement that meets specific requirements. You will have to include the reimbursements or allowances in income and then separately deduct the expense as a miscellaneous itemized deduction.
    (If the arrangement meets the requirements, the reimbursement or allowance isn't included in income and the expense isn't deducted. To meet the requirements the arrangement must require you to give a detailed account of your expenses to your employer and to return any excess allowance amounts you received over the expenses incurred.
  3. Investment expenses, and expenses of producing or collecting taxable income. This category includes investment advisor's fees, investment publications, and the cost of a safe deposit box.
  4. Hobby expenses. Expenses related to an activity that is a mere "hobby" (i.e., not a trade or business) are only deductible up to the extent of your income from the activity. You are taxed on the income and then only separately deduct the related expenses as miscellaneous itemized deductions.
There is one final caveat. The deduction for miscellaneous itemized deductions isn't allowed for purposes of the alternative minimum tax.
 
If you have questions, please contact us.  We would be happy to assist you with your tax situation.


Tuesday, January 10, 2017

Income Averaging for Farmers and Fishermen

Look at your tax situation for the past few years.  Do you notice that your taxable income varies greatly from year to year? If so, it is likely that your applicable tax rate may be varying from 0% to as much as 39.6%. Many people are unaware that income averaging is available to farmers and fishermen. The purpose of the income averaging rules is to alleviate the problem of your paying more tax overall if a substantial portion of your income happens to be bunched in one year.
 
As a farmer (or a fisherman), you can elect to average all or part of your taxable "farming income" or "fishing income" over three years. If you make the election, your farming or fishing income subject to the election is treated as if earned in the three previous years. Thus, the elected farm or fishing income is allocated to the three previous years (base years) in equal amounts.
 
For this purpose, farming (or fishing) income includes income from the trade or business of farming or fishing; but, farming (or fishing) income does not include income, gain, or loss from the sale of development rights, grazing rights, and other similar rights. Although farming (or fishing) income does not generally include compensation received as an employee, a shareholder of an S corporation (or a partner in a partnership) engaged in a farming (or fishing) business may generally treat compensation from the S corporation (or partnership) as income from farming or fishing. It also includes income from certain crop-share arrangements, certain vessel leasing arrangements, the sale or disposition of property (other than land), regularly used for a substantial period in a farming or fishing business. Thus, investment income is not eligible for income averaging. A farming business includes operating a nursery or sod farm and raising or harvesting ornamental trees or trees bearing fruit, nuts, or other crops. A fishing business includes the conduct of commercial fishing (i.e., fishing in which all or part of the fish harvested are intended to enter commerce).
 
Here's a simple example of how averaging works. Assume that F, a single farmer, sold some of his farm machinery and more corn than usual, and all of this happened in 2015. F's 2015 taxable income is $50,000, of which $30,000 is from his farming business. F had no taxable income in 2014, $5,000 of taxable income in 2013, and $10,000 of taxable income in 2012. Since F's income is higher than in previous years, F elects to average $30,000 of his 2015 income over the three base years (2014, 2013, and 2012). F figures his 2015 tax in this manner:
  1. He subtracts the elected portion of his current year's taxable farm income ("elected farm income") from his total taxable income. Thus, in 2015, F subtracts the elected farm income ($30,000) from his taxable income of $50,000. F's remaining 2015 taxable income is $20,000.
  2. He figures the tax on the amount in (1) using the tax tables or tax rate schedules for the current year (in this case, 2015). Under the 2015 tax tables, the tax on $20,000 is $2,543.
  3. For each of the three base years (2014, 2013, and 2012), F adds one-third of the current year's (2015) elected farm income ($10,000 each year) to his taxable income for that year and figures the tax on that amount. Then, in each of the three base years (2014, 2013, and 2012), F subtracts his actual tax from the tax computed for the base year.
  4. Then, F adds the amounts computed for the three base years (2014, 2013, and 2012) to the amount of tax computed for the current year (2015) ($1,050 + $1,305 + $1,500 + $2,543) for a total tax of $6,398. If F had not elected to average his farm income, his 2015 tax (computed under the tax tables) would have been $8,300. Thus, by making the election, F saved $1,902. 
With careful year-end tax planning, we may be able to maximize the benefits of averaging for you. Generally, you will benefit from the election if the income allocated to the three previous years will be subject to a lower tax rate than it would be in the current year. For example, it could be beneficial to accelerate income this year (e.g., sell appreciated farm assets this year). This acceleration would increase this year's farming or fishing income and the increase would receive the benefits of averaging. However, we also need to keep in mind that any amounts allocated to the three previous years as additional income will continue to be allocated to those years should you elect to average your farming or fishing income in future years. Thus, the allocated amounts will increase your taxable income in those years and may reduce any benefits that you might get from an election in later years.
 
Before making an election, we will need to consider all of the tax implications of the election. For example, we would need to determine the appropriate portion of your farm or fishing income that should be subject to the election.  Also keep in mind that this election can be made on an amended return.  So even if you haven’t utilized farm income averaging in the past, a review of your last 6 years of tax returns could identify potential refunds.
 
Please contact us if you have any questions concerning income averaging or if you would like to discuss how income averaging could benefit you.