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erally tax-deductible. If you've got extra cash now and want to lower your 2013 taxes even further, consider moving up donations you would have made in 2014.
• Gifts. Most people probably will never reach the $5.25 million lifetime gift tax exemption limit - beyond which you would have to pay the 40 percent gift tax. But, if you're feeling generous, remember that if you give someone gifts worth more than $14,000 this year, you'll need to file a Gift Tax Return along with your federal tax return, even though you won't necessarily owe any taxes on the amount. (Married couples filing jointly can give $28,000 per recipient.)
• Roth IRA conversion. People at any income level can convert part or all of their existing traditional IRAs or 401(k) plans from previous employers into a Roth IRA. With a Roth, you pay taxes now, but future earnings will accumulate tax-free. If your retirement is a long way off or you believe your income tax rate at retirement will be higher than it is today, such a conversion might make sense.
• Remember, however, that converted balances (for pretax savings and their earnings) get added to your taxable income, thereby increasing your taxes - and possibly boosting you into a higher tax bracket for the year. Just make sure you don't need to borrow money - especially from a retirement account - to pay for the additional tax burden today; otherwise you could undo the potential long-term tax advantage of converting to a Roth IRA.
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• Jason Alderman directs Visa's financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney
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