Tax considerations before year’s end
It’s tax time! Well, not really. But, it is time to start planning for end-of-the-year moves that will impact how much you pay in taxes at the beginning of 2004. Consider some the discussed here before the end of the year is on top of you.
First, think about the “AMT” – alternative minimum tax. Normally, we’d like to take more deductions in the current year and postpone receiving income until January 2 of the following year. Consult your tax expert — AMT, especially where there are capital gains to recognize, may cause you to want to reverse this strategy.
You may want to go to turbotax.com to review Intuit Inc.’s free “2003 Tax Relief Estimator” that calculates your taxes and that can tell you whether you’ve provided enough withholding and estimated taxes to cover your liability.
And you can go to www.irs.gov to download the forms you’ll need to complete to prepare your tax returns.
Charitable contributions (especially of high value, low cost items) and contributions to retirement plans are other techniques to adjust your tax liability.
In the past, folks sold depressed stocks in order to get a loss for the tax return and then purchased the same stock 30 days later. Congress has lowered the long term capital gain percentage which makes this strategy less attractive. But, hey, a saving is a saving by any name … Just be conscious of what you’re doing and why. And, your State tax may be high enough to continue to make this strategy important.
Just a few words for the wary … Now is the time to address the tax issue, not December 31st!
Happy hunting ….Tags: Cash Flow - Finances
Categorized in: Cash Flow - Finances