VIEWS: 11 PAGES: 7 CATEGORY: Business & Economics POSTED ON: 6/3/2010
Tax planning primarily concerns the timing and the method by which income is reported and deductions and credits are claimed. The basic strategy for all year-end tax plans is to time your income so that it will be taxed at a lower rate -- and to time your deductible expenses so that they can be claimed in a year in which you are in a higher tax bracket. Many of you can make various arrangements that will delay December 2008 bonuses, salaries, commissions and fees until January 2009. If you are self-employed, postpone sending out further bills until January 2009. Accelerating tax deductions to 2008 has the same tax effect as deferring income to 2009, since it decreases your 2008 net taxable income by the amount of the increased deductions. Make your $24,000 (married) or $12,000 (others) tax-free annual gifts to as many individuals as you choose. Among other benefits, it will reduce potential estate taxes in the future. Use it or lose it -- before December 31.
Tax Tips, Year-End 2008 Melvin H Daskal Agency Sales; Dec 2008; 38, 12; Docstoc pg. 40 Reproduced with per
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