YEAR-END TAX PLANNING TIPS
Consider pre-paying your January 2008 mortgage payment in December 2007 to take advantage of additional mortgage interest write off.
Review your expenditures paid in 2007 for college tuition and fees for yourself, spouse, and all dependents to take advantage of two new higher education credits. Consider pre-paying your Spring 2008 tuition & fees before the end of 2007.
If you currently make estimated tax payments to New York State, the January 2008 payment should be made prior to December 31, 2007.
If you expect to owe State taxes, have your employer increase State withholding prior to December 31, 2007, to take advantage of a possible tax deduction.
Self employed individuals should consider purchasing equipment, if needed, prior to December 31, 2007, for accelerated depreciation.
If you expect to make charitable contributions in 2008, consider pre-paying them in 2007.
If you expect to have bonus or self employment income prior to December 31, 2007, try to defer this money to be reportable as income in 2008.
If you have property tax bills that are payable in 2008, consider paying these taxes in 2007.
Since medical expenses and miscellaneous deductions, such as professional journals, union and professional dues, job related tuition expenses, and employee business expenses are subject to limitation, try paying these bills in 2007 to take advantage of bunching these deductions.
Time capital losses and capital gains to make the best use of the special rules for these items.
Pay any outstanding state taxes prior to December 31, 2007.
If employed, you should review your eligibility to make IRA contributions as well as contributions to employer pension plans. Self employed individuals should review the requirements and contributions for Simple IRAs, Simplified Employee Pensions, and Keogh plans.
Consider settling insurance or damage claims if this will result in a casualty loss deduction.
Avoid income tax on social security by reviewing your current year income to determine whether to defer or accelerate income or expenses |
