Subject: year end tax strategies

believe it or not, thanksgiving and the holidays are approaching, and i'm beginning to get the usual year end questions about tax savings strategies. Here goes.

CAR PURCHASES........ if you need one, buy it before year end. on a car, you can write off up to approximatley $11k of the purchase, to the extent the car is used for biz. on an suv ( over 6k pounds), it's not quite as straightforward, but let's say you can write off up to $25k of it's purchase, plus a bit more.

BUSINESS ASSETS........ up to $102k of equipment, computers , desks and chairs can be expensed in any one year. if you need them, try to buy them before year end. If you charge them before year end, and don't pay until 2005, you can still write them off in 2004. same goes for buying something with loan proceeds. buy in 2004, but pay later.

CHARGE CARD.......... just to continue with what i just said, anything biz expense that it charged b4 1/1/05 can be written off in 2004. you can pay for it in 2005, and claim it in 2004. just make sure it's charged before year end

PERSONAL IRS ESTIMATED TAX PAYMENTS......... next irs payment is due 1/17/05.

PERSONAL CA ESTIMATED TAX PAYMENTS......... it's due 1/17/05, but if you pay before 1/1/05, you can write it off on this year's taxes. i suggest paying this year.

CAPITAL GAINS........... irs max cap gains tax is still 15%. If you've gotten what you would like to from your investment, sell it b4 year end

CAPITAL LOSSES........ annual net loss (losses less gains) is limited to $3k annually. excess losses are carried over indefinately to future years. if you're planning to sell the stock anyway, sell it off before year end.

DEFERRING INCOME TO 2004........for cash basis clients ( that's most folks) income is measure by what you deposit into the bank. if you delay year end invoicing until late 2004, and don't receive payment until 2005, it's not income until next year.

ACCELERATE EXPENSES......... if you've got the cash available, pay your early 2005 bills in late 2004. you get a deduction in the year of payment.

JANUARY MORTGAGE PAYMENT....... if your payment is due in early january, pay it in december to claim more interest in 2004.

PROPERTY TAX PAYMENTS..... you get a deduction for all prop taxes paid in 2004. If you pay in installments, with the 1st due in late 2004 and the 2nd in early 2005 (In callifornia, the first installment is due 12/10/04 and the next 4/10/05.) and if you have the cash, pay both in december.

401K.............. if you can afford it, max out on your employer's plan before year end.

STOCK OPTION EXERCISES............ if you exercised in 2004, you may have to pay AMT tax. You should check with me ASAP so we can plan accordingly, and perhaps, take alternative and helpful action.

DONATIONS............. If you're planning on year end donations, date the check on or before 12/31. If you charge it, make sure it too is dated 2004. it's fine to claim the deduction on the charged amount, even if it's not paid until 2005.

you may have more specific questions. just let me know.

thanks. glenn