| 10 things taxpayers can do before December 31, | | | | which your medical care expenses for the year |
| 2008 to reduce the tax bill due on April 15, 2009 | | | | exceed 7.5% of your adjusted gross income. So if you |
| In this troubled economy, tax planning has never been | | | | have any medical procedures or dental procedures |
| more important, and small businesses and individuals | | | | that you're putting off, now is the time to get them |
| can get started on trimming taxes now, before the | | | | done. You don't have to pay for them necessarily, you |
| end of the year. It has been a bad year for many, so | | | | can put them on a credit card and just pay the |
| it's crucial to employ financial strategies that can help | | | | minimum balance on the credit card, but you can take |
| alleviate potential IRS increases and minimize tax | | | | the full deduction of the year that it took place. |
| liability. What I do as a tax resolution specialist is help | | | | 5. Pay you're an extra's month's worth of the |
| reduce a client's IRS debt, which is essentially | | | | mortgage. Make your January mortgage payment in |
| conducting financial planning in reverse. So I know how | | | | December, so you get can deduct that interest in |
| important it is for people to know their taxpayer rights | | | | 2008. |
| in the first place so they can avoid tax trouble as well | | | | 6. Pay your property taxes early. Pay your property |
| as save money. | | | | taxes that are due in 2009 by the last day of 2008 to |
| For 2008, savvy income and deduction management | | | | accelerate that deduction. |
| can help taxpayers make the most of a bad year. | | | | 7. Long term capital losses can be used to offset long |
| People will also want to consider maximizing annual | | | | term capital gains. If you had gains at the beginning of |
| contributions to retirement plan accounts, using long | | | | the year and losses now, you can use those losses to |
| term capital losses to offset long term capital gains, | | | | offset gains. If you have more losses than gains they |
| and taking advantage of popular tax breaks extended | | | | can only be used to offset 300 of ordinary income per |
| for 2008. These days, no one can know for certain | | | | year. Please keep in mind though that unrealized (not |
| what their future income will be like or what direction | | | | actually sold) losses, especially those in retirement |
| the financial markets will take. Plus tax rules can | | | | accounts are not deductible. |
| change, especially with a new Presidential | | | | 8. Use gift contributions to lower your tax liability. In |
| administration and a new Congress. Therefore the | | | | terms of gift giving, you can transfer up to $12K per |
| general rule is that the more prepared you are now, | | | | person per year without paying gift tax on the amount |
| the less you will likely owe later when the taxman | | | | transfers. If you have married grandparent, they can |
| comes. | | | | give $24K per person by splitting there fist. In 2009, |
| So start getting your 2008 taxes ready with these | | | | that exclusion rises to $13K each. Persons over the |
| simple tax tips that can help you reduce stress and | | | | age of 70 1/2 can contribute up to $100,000 from their |
| save money. | | | | retirement accounts to a charity of their choice without |
| 1. Accelerate your deductions into 2008. You want to | | | | paying taxes on that income. |
| essentially bunch together your deductible expenses | | | | 9. Maximize annual contributions to retirement plan |
| into 2008 if you can. For example, if you make state | | | | accounts. This is important because ones year's limit |
| estimated state income tax payments, you can make | | | | cannot be added to the next year's if not taken in time. |
| them on December 31 so you get the deduction (on | | | | Now contributions to IRAs may be applied |
| your federal return) in 2008. You can also charge | | | | retroactively, if made before the filing deadline and an |
| these expenses on your credit card(s) in 2008, receive | | | | individual's elective contribution. As many plan account |
| the deduction in 2008, even though you won't be | | | | owners have realized in 2008, it is that managing a tax |
| paying for them until 2009. | | | | preferred retirement account is not a "set it and forget |
| 2. Defer income into the 2009 so you don't pay taxes | | | | it." Now in 2008 you can deduct up to $15,500 per |
| on it in 2008. If you're self-employed or an independent | | | | individuals. If you're 55 and over, I believe that goes to |
| contractor (like a carpenter, electrician, plumber, | | | | $20k , and you can have an arrays of different |
| psychologist, psychiatrist, chiropractor, doctor, etc.) you | | | | investments in your 401K. As the individual, you can |
| can do work now in 2008, but not send out the | | | | choose the type of asset allocation or risk that you |
| invoices to your customers till January 1, 2009. This is | | | | want. |
| perfectly legitimate and you won't have to pay taxes | | | | 10. Take advantage of tax breaks. The Emergency |
| on that income till you receive payment in 2009. | | | | Economic Stabilization Act of 2008 includes several |
| 3. File your return on time, even if you don't have the | | | | tax breaks that may offer a little help to the average |
| money to pay your tax bill. If you can't afford to pay | | | | American. Many of the provisions extend tax breaks |
| your taxes, you can still file your return on time and | | | | that had expired at the end of 2007. Some of the |
| save 25% on the failure to file penalty right off the bat. | | | | popular tax breaks offer opportunities for tuition |
| What many people don't understand is that filing an | | | | deduction, extended write-offs for sales taxes, help for |
| extension just puts off the inevitable, because it's not | | | | disaster victims and some Alternative Minimum Tax |
| an extension of time to pay, it's just an extension of | | | | relief. |
| time to file. | | | | For more advice and information on reducing your IRS |
| 4. Accelerate your medical expenses. If you itemize | | | | debt, visit for a free tax relief consultation or call |
| your deductions, there's a limitation on medical | | | | 866-477-7762. |
| expenses and you may deduct only the amount by | | | | |