2008 Year-end Tax Planning for Individuals
November 19, 2008 - The end of 2008 is coming up fast. With the year drawing to a close, now is an ideal time to review your tax situation and evaluate strategies that may help minimize your tax bill. Once December 31 passes, your 2008 tax bill is essentially set. Taking certain steps before then can make a difference. How much you can save depends on your individual circumstances, but examination of the following general areas is worth a look — in addition to considering the tax impact of any special circumstances in which you might find yourself this year.
TRADITIONAL TECHNIQUES
Income shifting. One of the most fundamental year-end tax planning techniques involves accelerating deductible expenses into 2008 and deferring income, if economically feasible, into 2009. With the possibility of changes in the tax brackets following the elections, the deferral/acceleration issue becomes even more complicated. By delaying taxable income you defer taxes. Delaying taxable income may also prevent you from losing lucrative tax breaks that can be reduced or eliminated altogether as your income level rises and propels you into a higher tax bracket.
