Uncle Sam is Coming to Dinner – Plan Ahead and Enjoy the Holidays
December 1, 2009
Year end is soon approaching. As you sit down for your holiday dinner, remember that soon Uncle Sam will be visiting to enjoy his share of your bounty. Despite the hustle and bustle of the holidays, the savvy taxpayer will make room in their overstuffed holiday calendar to complete year end tax planning. Year end tax planning should be completed at least one month before the end of the year so that all tax issues are properly addressed and tax liability is minimized. If you would like to reduce your taxes this year, there are several options to be considered.
If your taxable income needs to be offset, you should consider selling assets that have lost value before the end of the year. Losses will offset gains, and to the extent that the losses are greater than the gains, you may be able to write off the losses against your income this year and in future years. If you are holding an asset that in all likelihood will not go up in value, consider a sale at a loss, which may, in turn, reduce taxable income.
Often, taxpayers borrow additional funds or make additional charitable contributions in order to obtain additional write-offs against their income. An additional write-off is only available if you qualify to itemize deductions. In order to itemize your deductions, you must…
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by: Gina M. Barry