| 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 2007 NEWSLETTER |
| Previous Newsletter Issues |
As the end of the year approaches it is
time to take a look at your potential tax
picture to see if there are any courses
of action to take that can reduce your
overall tax burden. We have been
meeting with some clients regarding tax
planning for this year. If you have any
questions please call and we will be glad
to set up a meeting or answer any
questions. Below are answers to some
of the commonly asked questions.
Alternative Tax Update
Congress is still working on trying to
pass a “fix” to the AMT for this tax year.
They will not have anything passed until
sometime in December. The IRS has
advised Congress that it will take at
least 10 weeks to update its computers
after the law passes. This will mean that
tax returns will not be able to be filed
until late January or early February.
Year End Planning
Be sure to pay by year-end all of the
2007 expenses for which deductions are
allowed on a personal return. You can
also use credit cards to make these last
minute deductible expenditures if you
want to conserve some cash. Charges
made on a general-use credit card are
deductible when made, even if paid off
in a later year. One word of caution is
depending on your adjusted gross
income prepaying state income taxes
will not reduce your tax liability due to
the AMT.
Another place to look before year end is
at your stock portfolio. If you have
taken some gains this year you should
review your current holdings to see if
there are any loss positions that may be
used to offset the gains. You can take
time to take a look at your potential tax
picture to see if there are any courses
of action to take that can reduce your
overall tax burden. We have been
meeting with some clients regarding tax
planning for this year. If you have any
questions please call and we will be glad
to set up a meeting or answer any
questions. Below are answers to some
of the commonly asked questions.
Alternative Tax Update
Congress is still working on trying to
pass a “fix” to the AMT for this tax year.
They will not have anything passed until
sometime in December. The IRS has
advised Congress that it will take at
least 10 weeks to update its computers
after the law passes. This will mean that
tax returns will not be able to be filed
until late January or early February.
Year End Planning
Be sure to pay by year-end all of the
2007 expenses for which deductions are
allowed on a personal return. You can
also use credit cards to make these last
minute deductible expenditures if you
want to conserve some cash. Charges
made on a general-use credit card are
deductible when made, even if paid off
in a later year. One word of caution is
depending on your adjusted gross
income prepaying state income taxes
will not reduce your tax liability due to
the AMT.
Another place to look before year end is
at your stock portfolio. If you have
taken some gains this year you should
review your current holdings to see if
there are any loss positions that may be
used to offset the gains. You can take
sufficient losses to end up with a
$3,000 net loss for the year. Net
losses above $3,000 have to be
carried over to future years.
You can adjust your tax withholdings
from your last paychecks to account
for possible under withholding. You
must pay in at least 90% of your
current (2007) tax liability or 100% of
your prior tax liability to avoid an
underpayment penalty. Also, if it looks
like you will have a refund you can
reduce your withholdings to get an
early “refund”.
Remember that contributions for 2007
to your traditional IRA must be made
by April 15, 2008 even if you file an
extension.
For businesses, the maximum amount
of tangible recovery property that may
be expensed under section 179 for
2007 is $125,000. The maximum
expensing amount for 2008 is
$128,000. A heavy SUV (weight 6,000
to 14,000 lbs) if used in business is
limited to $25,000; the balance is
depreciated under the regular
depreciation methods.
We are currently in the process of
hiring a new administrative assistant.
Alisha has moved up in Completax to
do more accounting and will be
assisting in the preparation of tax
returns this season. Dona Hall has
decided to officially retire this year.
We wish her the best and thank her
for her 25 years of service to
Completax.
We want to thank all of our clients for
your past and continued support and
we wish you all a Merry Christmas and
Happy Hanukkah.
$3,000 net loss for the year. Net
losses above $3,000 have to be
carried over to future years.
You can adjust your tax withholdings
from your last paychecks to account
for possible under withholding. You
must pay in at least 90% of your
current (2007) tax liability or 100% of
your prior tax liability to avoid an
underpayment penalty. Also, if it looks
like you will have a refund you can
reduce your withholdings to get an
early “refund”.
Remember that contributions for 2007
to your traditional IRA must be made
by April 15, 2008 even if you file an
extension.
For businesses, the maximum amount
of tangible recovery property that may
be expensed under section 179 for
2007 is $125,000. The maximum
expensing amount for 2008 is
$128,000. A heavy SUV (weight 6,000
to 14,000 lbs) if used in business is
limited to $25,000; the balance is
depreciated under the regular
depreciation methods.
We are currently in the process of
hiring a new administrative assistant.
Alisha has moved up in Completax to
do more accounting and will be
assisting in the preparation of tax
returns this season. Dona Hall has
decided to officially retire this year.
We wish her the best and thank her
for her 25 years of service to
Completax.
We want to thank all of our clients for
your past and continued support and
we wish you all a Merry Christmas and
Happy Hanukkah.