| Completax Planning, Inc. |
| 1100 Lincoln Avenue Suite 104 Napa, CA 94558 707-257-3995 800-244-3995 707-257-1306 fax |
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| December 2006 NEWSLETTER |
| Previous Newsletter Issues |
That time of year again to look at some
last minute tax planning between being
thankful and the New Year.
I have run across several “tax planning”/
“tax-saving” checklists recently so
thought it might be a good idea to list
some of the items that might be of
interest.
The first question might be should you
accelerate/defer income to 2006 from
2007? The situations where this might
come up are 1) where you expect to be
a different tax bracket next year, 2) your
filing status will change, 3) there may be
some additional credits available or 4)
you will start receiving Social Security.
Review your security portfolio and
decide whether it is time to make some
adjustments in your unrealized gains or
losses before year end.
Review your itemized deductions
medical, etc. and see if it makes tax
sense to pay in 2006 and thus increase
your deductible amounts.
Make energy saving improvements to
your home that qualify for tax credits or
purchase a credit-eligible hybrid car or
alternative fuel motor vehicle.
If you are facing a possible
underpayment penalty and are paid a
salary increase your withholding to
eliminate or reduce the tax penalty.
For a business, make expenditures
qualifying for $108,000 business
property expensing option under IRS
code section 179.
If you are going to have a loss from a
partnership or S corporation you should
check your basis to make sure the loss
will be deductible.
last minute tax planning between being
thankful and the New Year.
I have run across several “tax planning”/
“tax-saving” checklists recently so
thought it might be a good idea to list
some of the items that might be of
interest.
The first question might be should you
accelerate/defer income to 2006 from
2007? The situations where this might
come up are 1) where you expect to be
a different tax bracket next year, 2) your
filing status will change, 3) there may be
some additional credits available or 4)
you will start receiving Social Security.
Review your security portfolio and
decide whether it is time to make some
adjustments in your unrealized gains or
losses before year end.
Review your itemized deductions
medical, etc. and see if it makes tax
sense to pay in 2006 and thus increase
your deductible amounts.
Make energy saving improvements to
your home that qualify for tax credits or
purchase a credit-eligible hybrid car or
alternative fuel motor vehicle.
If you are facing a possible
underpayment penalty and are paid a
salary increase your withholding to
eliminate or reduce the tax penalty.
For a business, make expenditures
qualifying for $108,000 business
property expensing option under IRS
code section 179.
If you are going to have a loss from a
partnership or S corporation you should
check your basis to make sure the loss
will be deductible.
A taxpayer who is at least 70 ½ year
old can get an exclusion from gross
income for otherwise taxable
distributions of as much as $100,000
from an IRA -- as long as the money is
paid directly to a qualified charity. This
money will count towards your
required minimum distribution for the
year.
This new break is available only for
distributions this year and in 2007.
Congress also changed some rules on
deducting gifts of clothing and
household items. For contributions
made after Aug. 17 this year, you
generally can't deduct the value of
those items unless they're in "good"
condition or better. Congress didn't try
to define "good" but the Internal
Revenue Service may come up with
guidance.
However, there's an important
exception: You can still deduct the
value of an item that isn't in good
condition or better if the amount
claimed is more than $500 -- and if
you include a qualified appraisal with
your tax return.
These new rules apply to household
items such as appliances, furniture
and linens. They don't apply to items
such as paintings and other objects of
art or jewelry, which are covered
under a different set of rules. Consider
taking photos of significant gifts and
keep a detailed inventory of what you
donate.
Please do not hesitate to contact our
office should you have any questions
or need to make projections.
We wish you all a Joyous and Happy
Holiday Season. Merry Christmas and
Happy Hanukkah.
old can get an exclusion from gross
income for otherwise taxable
distributions of as much as $100,000
from an IRA -- as long as the money is
paid directly to a qualified charity. This
money will count towards your
required minimum distribution for the
year.
This new break is available only for
distributions this year and in 2007.
Congress also changed some rules on
deducting gifts of clothing and
household items. For contributions
made after Aug. 17 this year, you
generally can't deduct the value of
those items unless they're in "good"
condition or better. Congress didn't try
to define "good" but the Internal
Revenue Service may come up with
guidance.
However, there's an important
exception: You can still deduct the
value of an item that isn't in good
condition or better if the amount
claimed is more than $500 -- and if
you include a qualified appraisal with
your tax return.
These new rules apply to household
items such as appliances, furniture
and linens. They don't apply to items
such as paintings and other objects of
art or jewelry, which are covered
under a different set of rules. Consider
taking photos of significant gifts and
keep a detailed inventory of what you
donate.
Please do not hesitate to contact our
office should you have any questions
or need to make projections.
We wish you all a Joyous and Happy
Holiday Season. Merry Christmas and
Happy Hanukkah.