Act Now to Limit Your 2006 Tax Bill

Much like the Swallows returning to Capistrano eachPractically speaking, you still have time to address your
year, nothing is more consistent than taxpayerstaxes.
grumbling about the amount they owe in April eachAs I write this article, it is late October. While visions of
year. This need not be so.Thanksgiving and Christmas may be starting to peak
Taxes are a necessary element of life and you reallyyour interest, your 2006 taxes should also be wedging
can't do anything to get away from them. If your goaltheir way into your mind. Simply put, now is the time to
is to avoid paying taxes completely, you are probablytake action to limit your tax liability so you can smile
going to be disappointed. A better attitude is to have awhen you pay a small amount next April.
goal of limiting your taxes as much as possible. SimilarIf you are having a good year, you should sit down
to many things in life, this means you need to planwith an accountant and figure out how to move
ahead and take preventive steps.money around to your benefit. If you don't have an
The best time to address your tax situation is not inaccountant, consider your basic financial situation. Have
April each year. For those who love to file extensions,you fully funded your retirement accounts? Have you
the best time is really not in October when your lastmade all your quarterly estimated tax payments? Are
automatic extension is quickly running out. The bestthey accurate given your earnings this year versus last
time to deal with these issues is before the end of theyear? Do you have deductible items or needs you can
tax year in which the taxes will be due, to wit, addresspay for this year to lower your tax bill? The questions
your 2006 tax bill while it is still 2006!are fairly basic, but you should be addressing them
Ideally, you should site down in January or Februarynow.
each year and plan out how to limit your tax bill for theMuch like going to a dentist to get your teeth cleaned
upcoming year. Much like driving 55 on the freeway,to prevent cavities, limiting your tax bill is all about
this is a noble goal but is almost never done. Assumingpreventive maintenance. As we roll into November,
you are like most other people, you get on with yournow is the time to do it.
life and the next thing you know, the year is almost up.