Year-End Planning?

What kind of planning do you need for the end of the year when it comes to taxes?

QUESTION: Dave asks Norm Rollins about year-end tax planning.

ANSWER: Read what Norm Rollins says:

Small business owners and those who itemize their taxes can do the following:

•    Know your current income and expense status.
•    Pre-pay on some purchases you’d be making in January so that you can get as many deductions in the 2004 tax-year as possible.
•    Increase charitable contributions before the end of the year.
•    Make an extra mortgage payment.
•    If you get checks in the mail the week between Christmas and New Year, stick those in a drawer and deposit them after the New Year.

Doing these things will minimize the income and maximize your savings affect.

If you’re salaried and don’t itemize, you can load up your Roth IRA or your traditional IRA.  If you’re investing in mutual funds, look at where you stand with capital losses for the year. 

Where medical bills are concerned, everything over 7.5% of your income is tax deductible if you’ve paid them all by December 31.