David Bauman – Enrolled Agent
As 2007 draws to a close, most people are thinking about the holidays, family and get-togethers. It is the perfect time to take stock of the year and to look toward the future.
Here are some of the things I recommend you do to reduce your tax liability for 2007.
- Push end of the year income to January.
- Pay state estimated tax payment in December instead of the January 2008 due date.
- Pay Real Estate Taxes due in early 2008 in December 2007
- Clean out your house and donate non-cash items to an organization such as Goodwill or the Salvation Army. Be sure to document:
- A list of all the items given to the organization
- Date each item was purchased (if unsure, list year bought)
- Cost of each item (approximate if uncertain)
- Get a receipt showing the date of your contribution
- Garage Sale value at date of contribution
- Consider making cash contributions to your favorite charity in December 2007.
- Make an IRA contribution to an IRA by the due date of your return, excluding extensions.
- For self-employed individuals, make a contribution to a SEP, or Simplified Employee Pension, by the due date of your return, including extensions.
- If you have stock that has significantly increased in value, consider using this as a charitable contribution.
With a few simple actions, some planning and organization, taxpayers can prepare for the upcoming filing season while saving themselves money. For most of us, these steps can mean money back in our pocket in the upcoming months.
David Bauman is an Enrolled Agent with more than 20 years of tax preparation experience, 15 years as a self-employed tax practitioner and five as a Tax Manager for 1st Nationwide Bank. He has been with JK Harris since 2002.