Wednesday, October 28, 2009

Year End Tax Reminders

Our office was putting together a year end reminder newsletter and I thought I would share the thoughts I put together here on my blog:

Defer Income: If you are employed, review your retirement plan contributions and increase your contribution amount if possible. If you are retired, take advantage of the repeal of Required Minimum Distribution for 2009 (if you are age 70 1/2, you generally are required to withdrawal from your retirement accounts, Congress passed a law to allow retirees to fore go that requirement for the year 2009).

Capital Gains/Losses: If you have capital losses that carried over from 2008 to 2009, review your investments to see if you have any capital gains that you can realize with little or no tax implications. Perhaps you want to realize a loss to offset your other income, if you sell stock, mutual funds or other investment items any losses can offset first other capital gains and then second other ordinary income up to $3,000 per year. Don't generate more of a loss than you can benefit from.

Increase Deductions: If you itemize deductions, check to see if you can benefit from paying extra charitable contributions, property taxes, medical expenses to decrease your taxable income. But be careful if you are subject to Alternative Minimum Tax some of these items may not be beneficial.

Arizona Tax Credits: If you are an Arizona resident, don't forget to take advantage of the state credits (available as of the authoring of this article in late October) for Donation to School Tuition Organizations ($500 for single, $1,000 for Married Filing Joint), Fees paid to Public Schools ($200 for single, $400 for Married Filing Joint), Donations to Charities that Provide Assistance to the Working Poor ($200 for single, $400 for Married Filing Joint) and the Arizona Military Family Relief Fund ($200 for single, $400 for Married Filing Joint). Additional information on the first 3 credits can be found here: and the Military Family credit can be found here:

Just a few quick simple reminders to help you minimize your tax liability this year.