Still Some Time Left for 2010 Tax Planning

Year-end Planning

There are only 8 more days left in 2010. That means that for the most part, your ability to lessen your tax burden will soon come to an end.

I know that during the next week the last thing you want to think about is your 2010 taxes and to be truthful, any significant planning should have been done long before now. But, there are still some things to consider in the limited time available. Here are five items that may help minimize your taxes.

1) Gifts of  stocks and bonds to charities.  Instead of giving cash, consider donating appreciated stocks and bonds. You will receive a  charitable deduction for the full value of the item donated and not pay tax on any gain.

2) Consider paying your fourth quarter state income tax estimate before year-end. This strategy does come with some risk. If you anticipate having to pay “alternative minimum tax” for 2010, paying the estimate early yields no tax benefit.

3) Purchase business assets before year-end. This will increase your 2010 deduction and therefore lower your 2010 tax.

4) If you have one more pay check due you this year and your employer will allow, consider increasing your employee retirement contribution (i.e. 401(k) amount).

5) Paying tax deductions by credit card is the same as paying cash. If cash flow is tight, this strategy allows you to still deduct what you have charged on your credit card. Please be responsible, as much if not all of the benefit could be lost if you incur finance charges on the unpaid credit card balance.

The above are just a few of the tax planning opportunities you may have as the year comes to a close. If you need more information or just want to go over the above in more detail, please give us a call. Happy Holidays!!