Last-Minute Moves to Save 2009 Taxes
- posted by KLR
There are only a few weeks left before the year ends and your 2009 tax life is sealed in stone. However, there is still time for considering a few tax-wise moves that could save you money now or in the future.
On involves making gifts to others. A person can give any other person up to $13,000 in 2009 without incurring any gift tax. The annual exclusion amount increases to $26,000 per donee if the donor's spouse joins in making a gift. Anyone who expects eventually to have estate tax liability and who can afford to make gifts to family members should do so. In addition to avoiding a gift tax today, if the property you are gifting (such as stock) increases in value, that increase in value is also out of your estate. With today’s deflated stock prices, this may be worth considering a bit more carefully than in prior years.
Double check your potential tax liability for 2009 and compare it to amounts paid in via withholding or estimated taxes. If you think you may be underpaid – perhaps you missed an estimated tax payment earlier in the year – you can increase your withholding for the last one or two pay periods in the year. All amounts paid via withholding count as if they were paid evenly throughout the year. So if you missed an estimated payment and face a penalty for the late payment of the amount, you may be able to eliminate that penalty by increasing your withholding before year-end.
If you have a health flexible spending account (FSA) at work and you must use the account before year-end, check to see if you have any unused funds in your account. If you have unused funds that you are in danger of losing, consider expenditures such as eyeglasses, contact lenses, etc. And, don’t forget that nonprescription drugs like antacid, allergy medicine, pain relievers or cold medicines qualify for FSA reimbursement. You need to make the purchase prior to year-end even if you are not able to submit the reimbursement until after the first of the new year.
While I am not expecting anyone to go out and buy a new car because of my blog, it is worth noting that depending on meeting certain conditions you can deduct qualified motor vehicle taxes paid on the purchase of a car in 2009 that you will not be able to deduct in 2010 (unless Congress changes the law). There are also tax credits available for the purchase of a qualifying fuel efficient car. The most widely available type of these vehicles is the hybrid.We don’t want you to miss any of these opportunities. If you have any questions, call your KLR tax advisor today.
By. Frank Monti, CPA
Not For Profit Group
On involves making gifts to others. A person can give any other person up to $13,000 in 2009 without incurring any gift tax. The annual exclusion amount increases to $26,000 per donee if the donor's spouse joins in making a gift. Anyone who expects eventually to have estate tax liability and who can afford to make gifts to family members should do so. In addition to avoiding a gift tax today, if the property you are gifting (such as stock) increases in value, that increase in value is also out of your estate. With today’s deflated stock prices, this may be worth considering a bit more carefully than in prior years.
Double check your potential tax liability for 2009 and compare it to amounts paid in via withholding or estimated taxes. If you think you may be underpaid – perhaps you missed an estimated tax payment earlier in the year – you can increase your withholding for the last one or two pay periods in the year. All amounts paid via withholding count as if they were paid evenly throughout the year. So if you missed an estimated payment and face a penalty for the late payment of the amount, you may be able to eliminate that penalty by increasing your withholding before year-end.
If you have a health flexible spending account (FSA) at work and you must use the account before year-end, check to see if you have any unused funds in your account. If you have unused funds that you are in danger of losing, consider expenditures such as eyeglasses, contact lenses, etc. And, don’t forget that nonprescription drugs like antacid, allergy medicine, pain relievers or cold medicines qualify for FSA reimbursement. You need to make the purchase prior to year-end even if you are not able to submit the reimbursement until after the first of the new year.
While I am not expecting anyone to go out and buy a new car because of my blog, it is worth noting that depending on meeting certain conditions you can deduct qualified motor vehicle taxes paid on the purchase of a car in 2009 that you will not be able to deduct in 2010 (unless Congress changes the law). There are also tax credits available for the purchase of a qualifying fuel efficient car. The most widely available type of these vehicles is the hybrid.We don’t want you to miss any of these opportunities. If you have any questions, call your KLR tax advisor today.
By. Frank Monti, CPA
Not For Profit Group
Labels: Accounting, CPA, KLR, Monti, Tax
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KLR is one of New England's premier accounting and business consulting firms. With 160 team members and offices in Providence, Boston, Waltham and Newport, KLR provides a wide range of services to both individuals and businesses.
2 Comments :
Not very useful information. What else have you got?
I thought it was very informative. Thank you
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