Set aside time now to evaluate your tax situation before the window of opportunity closes on December 31. There are many tax savings moves that can still be done to affect your bottom line for 2009.
1. Retirement Accounts – You may want to make the maximum annual contribution limit for:
a. Individual Retirement Accounts (IRA) – at $5,000 ($6,000 if you are age 50 or older).
b. 401(k) Plans – at $16,500, ($22,000 if you are age 50 or over).
2. Plan year-end capital gains and losses – If you expect to recognize a capital gain this year, you may want to review your portfolio for possible capital losses to offset the gains. If on the other hand, you have capital loss carry forwards you may want to offset gains to use up such carry forwards
3. Timing of income and deductions – If you believe that you will be in a lower tax bracket next year, you may wish to accelerate your deductions in this year and postpone your income until 2010. On the other hand if you believe that you will be in a higher tax bracket next year, you may wish to accelerate your income for 2009 and postpone your deductions until 2010.
4. Charitable contributions – December is the season of joy and generosity. Your charitable gifts of cash or non-cash may generate tax deductions. Remember to keep all of your receipts.
5. Check your federal withholding – Back in February 2009, the “Making Work Pay Credit” was passed. This was implemented through federal withholding. You may want to check that your withholding is in line with your tax situation for 2009.
6. For your business – The additional 50 percent first-year depreciation deduction for qualifying property will expire December 31, 2009. Also, the maximum section 179 deductions you can elect for property you placed in service in 2009 is $250,000. This limit is scheduled to drop to $125,000 in 2010.
For more information contact Rebecca Robins, CPA/PFS, CFP™, at 661-702-9680. The office is located at 25001 The Old Road in Stevenson Ranch.
Insurance Lic#0D75745. Securities offered through H.D. Vest Investment ServicesSM, Member SIPC, Advisory Services offered through HD Vest Advisory ServicesSM, a non-bank subsidiary of Wells Fargo & Company, 6333 North State Highway 161, Fourth Floor, Irving, TX 75038 972-870-6000. *For specific tax advice relating to your situation, please consult your tax advisor. Information was obtained from www.irs.gov .