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Date
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Item
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Actions
needed
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__/__
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Be organized.
Having your
records in a usable manner will make preparing your return easier
and may help you with deductions you might have forgotten about.
Consider using
a software program like Quicken or Money to keep you organized.
You should also keep a file of receipts and other records you know
you will need.
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1.
2.
3.
|
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__/__
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Contribute
to your 401(k) plan.
By deferring
wages into your plan, you will keep your taxable income lower, save
money for retirement, enjoy the benefits of tax-deferred compounding
of earnings within the account and probably get some form of "match"
from your employer.
|
1.
2.
3.
|
|
__/__
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Use proper
withholding and estimated payments.
Getting a large
refund is nice, but wouldn't you rather have the money now instead
of waiting for a refund? You may want to consult with your accountant
to make sure you are properly covered.
|
1.
2.
3.
|
|
__/__
|
Consider
giving appreciated stock to charities.
By giving appreciated
stock instead of cash, you can get a charitable contribution for
the fair market value of the gift and not have to pay tax on the
capital gain. There are some rules that apply, so consult your advisor.
|
1.
2.
3.
|
|
__/__
|
Contribute
to your IRA early.
The earlier
you contribute, the sooner the earnings become tax deferred.
|
1.
2.
3.
|
|
__/__
|
Manage your
itemized deductions.
If your level
of itemized deductions is close to what is needed to use them, consider
"bunching" deductions every other year.
|
1.
2.
3.
|
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__/__
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Use tax-advantaged
borrowing.
Not all interest
you pay is tax deductible. The interest paid on your mortgage and
home equity loans gets treated better than interest paid on credit
cards.
|
1.
2.
3.
|
|
__/__
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Be careful
of mutual fund taxation.
Mutual funds
pay no income taxes, but shareholders must report all distributions
of dividends, interest and net capital gains.
If your fund
has experienced much turnover within the portfolio, there may be
capital gain distributions regardless of changes in the fund's value.
|
1.
2.
3.
|
|
__/__
|
Consider
tax-exempt bonds.
The interest
on bonds issued by state and municipal entities is exempt from federal
taxation.
|
1.
2.
3.
|
|
__/__
|
Consider
tax deferred investment options.
Annuity contracts
issued by insurance companies enable earnings to remain tax deferred
within the contract. They act somewhat like IRAs, but can have fees
and other expenses.
|
1.
2.
3.
|
|
__/__
|
Monitor capital
gains and losses.
Long-term capital
gains on investments held for more than a year get taxed at lower
rates than other types of income.
Net capital
losses up to $3000 can be deducted with any excess carried forward.
Review your
portfolio regularly, especially near year-end, to take advantage
of the capital gain rules.
|
1.
2.
3.
|
|
__/__
|
Alternative
minimum tax.
This "extra"
tax can apply if your deductions and certain other items exceed
certain levels. Millions are being surprised by the AMT.
Discuss the
AMT with your tax advisor to determine if you may be subject to
it and to identify steps that may lessen the tax.
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1.
2.
3.
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