Crowe Horwath LLP has issued a year-end tax-planning guide with information on income tax deductions, education planning, investing, retirement and estate planning, and tax rates.

In Tax Planning: 2014 Year-End Guide, the firm noted that high-income taxpayers are now subject to the Affordable Care Act’s net investment income tax. Starting in 2013, the NIIT makes taxpayers with incomes over $200,000 per year ($250,000 for married taxpayers filing jointly) subject to an extra 3.8 percent tax on the lesser of their net investment income, or the amount by which their modified adjusted gross income exceeds the applicable threshold.

Taxpayers should understand the potential tax consequences of buying, holding and selling an investment, particularly high-income earners. Because the NIIT is triggered based on adjusted gross income, strategies to reduce AGI—such as making deductible retirement contributions—also could reduce NIIT liability, he noted.

“Many high-earners were surprised to find that when they filed their 2013 taxes their income was subject to the new NIIT,” said Gary Fox, managing partner of Crowe Tax Services, in a statement. “This year, they’re looking to avoid or minimize those fees by implementing strategies such as using unrealized losses to absorb gains.”

Fox added that high-income taxpayers also should be aware of a new “phantom tax,” which disallows deductions and results in their taxes increasing even though their tax rates are unchanged. Beginning in 2014, married taxpayers with AGI in excess of $305,050, and single taxpayers with AGI in excess of $254,200, will see a reduction in their otherwise allowable itemized deductions. The reduction applies to all itemized deductions other than medical expenses, investment interest, or casualty, theft or wagering losses.

The impact of the midterm elections earlier this month, with Republicans taking control of the Senate in January, is sure to play a role in tax reform and tax planning.

“During the next two years, there likely will be much discussion about tax reform, including the Affordable Care Act, excise taxes and top-tax rates, but it might be hard for Congress to enact any substantial changes ahead of the next presidential election without enough votes to override a presidential veto,” said Fox.

To download the guide, visit www.crowehorwath.com/yearend-NR.

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