Now is the time to begin planning for 2009 taxes – and for 2010 tax strategies.
As with past years, the goal is to pay the least amount for 2009 and 2010 together. To do this, the common wisdom is to push income into 2010 and accelerate deductions into 2009. This is especially true if rates will go up in the future.
However, if you will be in the AMT for either year, or if one year with have especially large deductions or income, then the strategies change.
Also, there are some special considerations for planning this year:
* There are certain benefits only available in 2009 or 2010 such as the conversion to a Roth IRA with no income cap and the first time home buyer credit;
* Tax rates after 2010 are likely to go up as reductions in rates from the Bush tax laws end after 2010;
* You may have capital losses to shelter capital gains so you want to use them well;
* Furthermore, there may be taxes to pay for health care law and the stimulus package;
* Make sure you use your Flex account funds and any frequent flyer miles that will expire; and
* Finally, some features may be extended, such as the $8,000 first time home buyer credit.
Sitting down to review 2009 and 2010 could save you money. Also, the work you do now will help on what you owe for 2009 as well as the tax preparation.
There is a very good article with details on this from Kiplinger’s Tax Newsletter that I can forward to you if you wish – Let me know
Let us know if you have questions or comments. Thanks,