Tax Tips for 2012
Posted by Kim Perkins on October 24th, 2011
Thanks to the extension of the 2001 and 2003 tax cuts, the current federal tax environment remains favorable to the individual and the small business owner. Now is a great time to take advantage of the low tax rates because we can’t predict what the future tax rates will be. Here are two tax planning ideas to consider during the fourth and final fiscal quarter of 2011:
1). Leverage your standard deduction by bunching certain deduction items and claiming them every other year. Claim the standard deduction during the intervening years. Examples of deductible items which can be bunched every other year to lower your federal income taxes include charitable contributions, state income taxes, and personal property taxes.
2). If you expect to be in a lower tax bracket in 2012 it may pay to defer taxable income from this year into the next. How to do that? If you’re a cash basis taxpayer, send out client/customer invoices late in the year. That way, you won’t receive payment until early 2012.
These and other tax planning maneuvers are often overlooked by the tax preparation software sold to the general public. Green Apple Resources works with the client to review their tax liability. Our goal is to defer the clients tax liability for as long as possible allowing the client to invest that money or pay down debt.
If you have any questions regarding your current tax profile or your past tax profile, please contact us…
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