Thinking Taxes

There are a few things you can do in regards to 2008 taxes and this is the time to examine your incomes and expenses year-to-date.

Donate to charity. If you are considering donating that old car, now is the time to do so. If you support charities regularly, increase your gifts between now and December 31.

Accelerate deductible expenses. If you itemize and qualify for medical expense deductions, add to that column of your expenses. Get to the dentist, eye doctor, and purchase medications ahead of the first of the year.

Also consider paying ahead local taxes like real estate. If you make estimated tax payments toward your state liability, make your 1/15/09 payment early. It will count on your Schedule A.

Defer income into the new year like bonuses. If you have savings bonds maturing, wait until 2009 to cash them.

If you have capital gains to report for the year, consider realizing some losses to offset. The maximum you can write off is $3,000 per year. Matching the positives against the negatives will reduce your bottom line.

Max out your contributions to IRAs and 401(k)s and the like. These reduce your taxable income and you will be glad the $ is there in retirements.

'til later