Bob O'Brien
Head Instructor
bobrien@mywealth.com
While you’re spending all that money on holiday shopping, don’t forget to consider a couple of year end tax saving strategies for perhaps a larger tax refund or smaller liability depending upon your withholding.
1. Consider paying some extra on your mortgage like the January payment. The extra interest you pay will be deductible in 2008.
2. Clean out your closet or attic and give clothes, old furniture and books to a charity like Salvation Army and the local library. Ask for help to determine the value and a receipt. If you itemize this can really add up and save you hundreds and perhaps even thousands.
3. Consider selling investments that are trading at a loss. For tax purposes you are better off taking a loss in order to take advantage of either offsetting against gains or ordinary income of up to $3000.00 a year. Make certain you stay out of the investment for 31 days in order to avoid the Wash Sale Rule.
4. Consider paying your state and local taxes by the end of the year so they are deductible in 2008. This is where good year end planning can really add up, when you start to determine which year is best to take a deduction or income.
5. If you have a high net worth consider gifting some money away to your children. The IRS allows you to give up to 12k a year without triggering estate / gift tax liability. (13k in 2009) This makes more and more sense with A Democratic majority and estate tax thresholds decreasing. The smaller your estate the less you will have to pay in estate taxes.
Remember that a good tax advisor/preparer can really be worth there salt and getting your taxes done early can also create some savings too. Many CPA’s offer an early bird special, if you get them your information in February. This also allows a better dialogue between you and your tax advisor. I can speak from experience from preparing taxes, that the clients that got there information into the office in April did not get the same deductions that the client got in February and March. Simply, because you where not going to start playing phone tag with someone that close to April 15th in order to determine what they did and if it’s deductible!
Happy Holidays and be sure to check out our courses at www.mywealth.com
Bob O'Brien
Sr. Instructor
