Early fall is the perfect time to take stock of your
tax situation for the year. You have enough information
to produce a reasonably close estimate of your 2008
income and deductions, and there's still enough time
left before year-end to make some tax-saving moves.
Here are a few possible tax-savers to consider.
* Avoid tax underpayment penalties by adjusting your
income tax withholding over the remainder of 2008.
Withholding is treated as having been paid in evenly
over the full year.
* Review your investment portfolio for year-end
offsetting of gains and losses. Don't forget that you
can apply up to $3,000 of net capital losses against
ordinary income such as wages.
* Make retirement plan contributions up to the maximum
allowed. That's $15,500 to a 401(k) and $10,500 to a
SIMPLE ($20,500 and $13,000, respectively, if you're
50 or older). This year's IRA limit increased from
$4,000 to $5,000 (to $6,000 if you're 50 or older).
* Remember that the "kiddie tax" now applies to you if
your child has unearned income over $1,800 this year
and is under age 19 (under age 24 if a full-time
student).
* You have until December 31 to take any required
minimum distribution from your retirement plans. If
you just turned 70½ in 2008, you can postpone a first
distribution until next April 1, but then you'll have
to take two distributions in 2009.
The tax law changes so frequently that you could miss
opportunities if you don't invest a little time in an
annual review of your tax situation. Call us now at
828-654-6226 if you would like to get together to discuss
your tax-cutting options.