Year End Tax Planning And Preparation For Individuals - Tax Tips
By Dianne Goodman, Thu Dec 8th

CHECK BACK FOR UPDATED INFORMATION AS NEW INFORMATION ISUNAVAILABLE AT THIS WRITING BUT IS COMING SOON

Now is the best time to start thinking about your year endtax planning. These tax strategies can be put into effect by theend of the year and some as late as when the tax return is due.Planning now will save you money and reduce your tax liabilitynot only with your IRS taxes but also with your state taxes.Here are tax tips that will help you accomplish your goal.

HELP FOR HURRICANE VICTIMS

For specific information for Katrina and Rita hurricanevictims go to www.dgoodmancpa.com/katrinahurricane.htm.

MINIMIZE YOUR CAPITAL GAINS

Review your capital gains and losses for the year includingtaxable investment accounts and taxable real estate sales. Ifyou have net capital gains, you may want to sell some of yourinvestments that have a loss to offset the gain. You should alsocheck your 2004 tax return for any loss carry forwards to 2005.

SALES TAX DEDUCTION

Taxpayers who itemize deductions can choose between claiming thestate income tax or sales tax as a deduction. The IRS willprovide optional tables for use in determining this sales taxdeduction if tax payers do not keep their receipts throughoutthe year. Sales tax paid on motor vehicles and boats may beadded to the table amount up to the general sales tax rate.

EDUCATOR'S DEDUCTION

Eligible educators are permitted an "above-the-line" deductionup to $250 per year for non-reimbursed expenses incurred inconnection with books, supplies, computer equipment andsupplementary materials used in the classroom.

OPEN AN INDIVIDUAL RETIREMENT PLAN ACCOUNT (IRA)

See www.dgoodmancpa.com/smallbusinessretirementplan.htm#INDPLANfor an example of what you can do to defer income untilretirement. You can open your 2005 IRA as late as April 15th of2006. You may want to consider a Roth IRA. They are not taxdeductible but also are not taxable when withdrawn atretirement.

NEW ENERGY CREDITS AVAILABLE FOR 2006

New credits are available in 2006 for alternative motorvehicles and residential energy expenses. Information is comingabout this so you may want to check back or bookmark this site(ctrl + d) or check the irs.gov website for updated informationbefore you make these purchases in 2005. Please note these arecredits and not deductions so they could have a significantimpact on your taxes since they are a dollar-for-dollarreduction to your tax bill.

GET

Credit Card - Secured And Unsecured
Information covering the differences between secured credit cards and unsecured credit cards.
Rate Hike On Credit Cards
Did your rate go up on you credit card and you're wondering why? It's all explained in your card holders agreement.
Traveling With Credit Cards
Article offers useful hints and tips when traveling with credit cards.
Blocking on Credit Cards
Explains what credit card blocking is and how if affects the amount of credit available.
Consumer Credit And Credit Cards
Offers info on consumer credit card spending and debt statistics.

ORGANIZED

Clients always ask me what I need in order to do their taxes.For 90% of the population, with a little organization, your taxpreparation doesn't have to be overwhelming and can cost less ifyou submit organized documents to your tax professional. First,when you get those tax documents in the mail, have a folderready to just drop it in there and forget about it until taxtime. Most tax documents are required to be mailed by January31st so you should have almost everything by the first week ofFebruary. If not, call to have them send a duplicate. Next, gothrough your check book, credit card statements and cash payoutsfor the basic deductible items. This would include your medicalexpenses including eye glasses, taxes paid including vehicleregistrations, donations and any employer expenses that were notreimbursed. Don't forget day care expenses, student loaninterest and tuition if any of those apply to you.

NEW SIX-MONTH EXTENSION

And for those of you who aren't able to get your returnfinished by April 17th, 2006, when you file your Form 4868extension it will now be good for six months automaticallyrather than the previous four months.

TAX PLANNING FOR YOUR BUSINESS

Go to www.dgoodmancpa.com/yearendtaxplanningbusinesses.htm forwhat you can do to prepare your business for year end.

These are just some tax tips you should consider when thinkingabout your year end tax planning. If you have a specificquestion about your particular situation, e-mail me atdianne@dgoodmancpa.com and I will help you work through the taxplanning issues you may have. This article was intended toprovide general information about year-end tax planning. It doesnot contain all the rules and exceptions that may apply to yoursituation. If you have further questions regarding year end taxplanning, I can be reached at www.dgoodmancpa.com.

You have permission to reprint what you just read. Use it inyour ezine, at your web site or in your newsletter. The onlyrequirement is to include the following footer...

2005 Year End Tax Planning and Preparation for Individuals - TaxTips for 2005 by Dianne Goodman, visit www.dgoodmancpa.com formore content like this.

About the author: Dianne Goodman, CPA - Specializes in servicing Small Businessesand Individuals. Visit www.dgoodmancpa.com for relevant andcurrent information on a variety of financial and tax issuesfocusing on small businesses and individuals or call at1-888-851-1975.

CONTACT INFORMATION

Dianne Goodman, CPA Comprehensive Small Business Solutions, PC505 323-2307 1 888-851-1975 toll free www.dgoodmancpa.com