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Date
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Item
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Actions
Needed
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Taking
Action
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Articles
From
Library
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Be organized.
Having
your records in a usable manner will make preparing your return
easier and may help you with deductions you might have forgotten
about.
Consider using
a software program like Quicken or Money to keep you organized.
You should also keep a file of receipts and other records you know
you will need.
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2.
3.
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Developing
an Effective Income Tax Strategy
Tax
Implications of Financial Decisions
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Contribute
to your 401(k) plan.
By
deferring wages into your plan, you will keep your taxable income
lower, save money for retirement, enjoy the benefits of tax-deferred
compounding of earnings within the account and probably get some
form of "match" from your employer.
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1.
2.
3.
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Meet with a
financial advisor to determine how the investments within your employer
plan fit within your overall investment strategy.
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Take
Full Advantage of Your Employer's 401(k) Plan |
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Use proper
withholding and estimated payments.
Getting
a large refund is nice, but wouldn't you rather have the money now
instead of waiting for a refund? You may want to consult with your
accountant to make sure you are properly covered.
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2.
3.
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Consider
giving appreciated stock to charities.
By giving
appreciated stock instead of cash, you can get a charitable contribution
for the fair market value of the gift and not have to pay tax on
the capital gain. There are some rules that apply, so consult your
advisor.
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2.
3.
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Visit
with a trust officer to help you evaluate this technique as well as
other planned giving strategies. |
Charitable
Giving Strategies
Consider
Charitable Contributions of Appreciated Stock
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Contribute
to your IRA early.
The
earlier you contribute, the sooner the earnings become tax deferred.
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1.
2.
3.
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Contribute
to an IRA for yourself and your spouse. |
An
IRA Refresher
Are
You Aware of the New Benefits of IRAs?
Can
$5000 IRA Contributions Really Add Up?
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Manage your
itemized deductions.
If
your level of itemized deductions is close to what is needed to
use them, consider "bunching" deductions every other year.
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2.
3.
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Use tax-advantaged
borrowing.
Not
all interest you pay is tax deductible. The interest paid on your
mortgage and home equity loans gets treated better than interest
paid on credit cards.
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1.
2.
3.
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Examine
the details and rates offered through home equity loans. |
Home
Equity Loans |
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Be careful
of mutual fund taxation.
Mutual
funds pay no income taxes, but shareholders must report all distributions
of dividends, interest and net capital gains.
If your fund
has experienced much turnover within the portfolio, there may be
capital gain distributions regardless of changes in the fund's value.
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2.
3.
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Meet with a
financial advisor to help you examine your mutual fund holdings,
especially the levels of fees and turnover.
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Investing
in Mutual Funds
Mutual
Funds and Income Taxes
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Consider
tax-exempt bonds.
The
interest on bonds issued by state and municipal entities is exempt
from federal taxation.
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1.
2.
3.
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Meet
with a financial advisor to evaluate whether municipal bonds are appropriate
for your investment strategy, given your tax situation. |
Investing
in Municipal Bonds
Comparing
Taxable and Tax Free Yields
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Consider
tax deferred investment options.
Annuity
contracts issued by insurance companies enable earnings to remain
tax deferred within the contract. They act somewhat like IRAs, but
can have fees and other expenses.
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2.
3.
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Meet
with a financial advisor to further investigate these tax advantaged
opportunities. |
Taxable,
Tax Advantaged, Tax Deferred and Tax Free
Understanding
Fixed Annuities
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Monitor capital
gains and losses.
Long-term
capital gains on investments held for more than a year get taxed
at lower rates than other types of income.
Net capital
losses up to $3000 can be deducted with any excess carried forward.
Review your
portfolio regularly, especially near year-end, to take advantage
of the capital gain rules.
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1.
2.
3.
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Meet
with a financial professional to review your investment portfolio. |
Tax
Implications of Financial Decisions |
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Alternative
minimum tax.
This
"extra" tax can apply if your deductions and certain other items
exceed certain levels. Millions are being surprised by the AMT.
Discuss the
AMT with your tax advisor to determine if you may be subject to
it and to identify steps that may lessen the tax.
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1.
2.
3.
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Beware
of the AMT |
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Tax
advisor.
Everyone's tax situation is different and the rules can be very complex.
Be sure to get the professional advice you need. |
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