NEWSLETTER

YEAR END TAX STRATEGIES

 1.  PREPAY PROPERTY OR ESTIMATED STATE INCOME TAXES DUE IN EARLY 2009.  Pay before December 31, and you can deduct the expense on your 2008 tax return.  For 2008 only, a provision in the Housing Assistance Tax Act will allow taxpayers who take the standard deduction to deduct state and property taxes - up to $1,000 if they file jointly, and $500 for single filers.

2.  TAKE CAPITAL LOSSES.  Sell a losing investment before year end and you can use the loss to offset capital gains realized this year.  If you have more losses than gains, you can use up to $3,000 in losses to offset other income.

3.  MAXIMIZE WORKPLACE RETIREMENT PLAN CONTRIBUTIONS.  You can contribute up to $15,500 to a 401(k) plan in 2008 if you're younger than age 50 and $20,500 if you're 50 or older.

4.  FUND A DEDUCTIBLE IRA.  In 2008, you can contribute up to $5,000 to an IRA if you're younger than age 50, or up to $6,000 if you're age 50 or older.  IRA contributions are tax deductible if you don't qualify for a workplace plan or, if you do qualify and you are a single taxpayer with adjusted gross income(AGI) of less than $63,000 or you are married filing jointly and your combined AGI is less than $105,000.

5.  DONATE TO A CHARITY.  There is still time to make charitable contributions and deduct them in 2008.  The donation must be to a "qualifying organization" which generally includes churches and other religious organizations.  Taxpayers must have written proof of all charitable contributions.

6.  ADJUST WITHHOLDING OR ESTIMATED TAX PAYMENTS.  if you received a large tax refund, you probably have too much of your salary withheld(or if you're self employed you made larger than necessary estimated payments).  Rather than waiting until next spring to get your money back, reduce your withholding(or estimates) and use the extra money to increase your retirement plan contributions.