Don’t Neglect the Importance of Tax Planning
As we currently witness a period of economic drought, many people suffering financially tend to neglect the importance of tax planning. It is during times like these that taxpayers can benefit most from the proper income tax planning for short and long term tax strategies.
In order to stimulate the economy, Congress has applied several key changes to the federal tax laws, which creates challenges for taxpayers when attempting to accurately apply those variations in personal situations.
Several issues to consider as we head into the last quarter of 2009 include the following:
- Investment and Retirement Strategies – Tax qualified contributions can help reduce current tax liability and increase your retirement portfolio for the future.
- Real Estate– The first time homebuyer credit offers a tax credit up to $8,000 for those purchasing taxpayers purchasing their first home in 2009. (Houses take approximately 6-8 weeks to close, so act fast!)
- New Car Purchase– Switching to a fuel efficient vehicle may provide additional tax credits. Also, income tax deductions at the state and local level decrease the sales tax on the purchase of a new car.
- Gift Taxes– The amount of a nontaxable gift increased in 2009 to $13,000 per recipient. Gifting money provides means of transferring money to heirs while reducing one’s taxable estate. Make even more use of this technique by gifting stock you expect will rebound in the future.
Update your tax planning strategy and take advantage of the available tax breaks while they last!