Midyear Financial and Tax Planning Checkup
Category: Tax Law and Planning, Financial Planning
Portsmouth Herald Financially Speaking by Holly Hunter: Mark calendar for midyear financial checkup - If your spring cleaning resulting in a pile of papers to go through, or you resolved to make some financial housekeeping changes this year, some food for thought.
Also, some views from James Jimenez, CPA, a partber at Fass & Associates, certified public accountants located in Parsippany, New Jersey as to mid-year tax tuneups:
"CUT YOUR TAXES WITH MID-YEAR PLANNING
ItÂs summertime! Probably the last thing on your mind is tax planning. The problem is that if you wait until December to think about your 2005 taxes, there wonÂt be enough time for any tax strategy to take effect. But if you take the time to plan now, you still have six months for your strategy to work this year. So set aside some time for tax planning right now. Begin by pulling out your 2004 tax return.
* Review your income and deductions for last year. Did you lose any credits or deductions because your income was above a certain threshold amount? If so, find out what you can do to keep this yearÂs income below the threshold in order to save the tax break.
* Evaluate your investment portfolio. By now you should have an idea whether youÂll be selling any investments this year. Taking losses by pruning your portfolio can be an effective way to manage income.
* Build a retirement fund and cut taxes too. Take advantage of the new higher contributions allowed for IRAs, SIMPLEs, SEPs, and 401(k) plans. If you will be 50 or older by December 31, take advantage of the additional Âcatch up contributions you can make to your retirement plan.
* Check out education tax breaks. If you or your children are in college, review the education tax breaks for 2005. These include the deduction for higher education expenses, a deduction for student loan interest, and contributions to Section 529 plans or education savings accounts.
* DonÂt overpay your taxes. Finally, if you received a large refund on last yearÂs taxes, consider reducing your withholding for this year. To adjust your withholding, file a new Form W-4 with your employer."
ItÂs summertime! Probably the last thing on your mind is tax planning. The problem is that if you wait until December to think about your 2005 taxes, there wonÂt be enough time for any tax strategy to take effect. But if you take the time to plan now, you still have six months for your strategy to work this year. So set aside some time for tax planning right now. Begin by pulling out your 2004 tax return.
* Review your income and deductions for last year. Did you lose any credits or deductions because your income was above a certain threshold amount? If so, find out what you can do to keep this yearÂs income below the threshold in order to save the tax break.
* Evaluate your investment portfolio. By now you should have an idea whether youÂll be selling any investments this year. Taking losses by pruning your portfolio can be an effective way to manage income.
* Build a retirement fund and cut taxes too. Take advantage of the new higher contributions allowed for IRAs, SIMPLEs, SEPs, and 401(k) plans. If you will be 50 or older by December 31, take advantage of the additional Âcatch up contributions you can make to your retirement plan.
* Check out education tax breaks. If you or your children are in college, review the education tax breaks for 2005. These include the deduction for higher education expenses, a deduction for student loan interest, and contributions to Section 529 plans or education savings accounts.
* DonÂt overpay your taxes. Finally, if you received a large refund on last yearÂs taxes, consider reducing your withholding for this year. To adjust your withholding, file a new Form W-4 with your employer."
posted by Deirdre R. Wheatley-Liss, Esq. @ 12:19 PM
1 comments
1 Comments:
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