8 Steps to Cut Your 2004 Tax Bill
While the official deadline for filing taxes this year is April 15, 2005 for most of us, a great deal of money and angst can be saved if we focus on December 31st of this year as the true deadline to get our taxes in order.
Woburn, MA (PRWEB) December 12, 2004 -- As the end of the year approaches, it
will soon be time to focus on tax time. But in some cases, that will be too late
and can prove more costly. According to Andrew Schwartz, CPA and founder of the
MDTAXES Network of CPA’s who specialize in providing tax and accounting services
to health care professionals, “It's not too late to cut your 2004 tax bill.
Prior to December 31st, everyone – particularly health care professionals –
should consider the following:
1. Increase your 401(k) and
403(b) contributions if you haven't been contributing at the maximum rate all
year. This year you can put away up to $13,000 ($16,000 if 50 or older) into
your 401(k) or 403(b) plan. If you’re self-employed, consider setting up a Solo
401(k) by 12/31.
2. Take a look at your withholding and
instruct your employer to withhold additional taxes if you haven’t had enough
taxes withheld during the year to avoid getting hit with an underpayment
penalty.
3. Consider selling your non-retirement
investments that have decreased in value since your capital losses can offset
other capital gains realized during the year (including from your mutual funds),
and then can be used to offset up to $3,000 of wages and other income.
4. Send in your January, 2005 mortgage payment early
enough so it will be processed prior to 12/31/04. By sending in your payment a
few weeks early, you can deduct the interest portion of that payment a full year
earlier.
5. Clean out your closets and donate your
clothing and household items to a charitable organization since "non-cash"
contributions are deductible if you itemize. Don’t forget to get a receipt. For
gifts of money, making your donation by credit card before December 31st allows
you to deduct the donation on this year's return, even if you don't pay your
credit card bill until 2005.
6. Pre-pay your projected
state tax shortfall if you'll be itemizing your deductions and won't be subject
to the alternative minimum tax.
7. Pay off your medical
bills if your total medical expenses exceed 7.5% of your income and you itemize.
8. Evaluate whether you'll save any taxes by postponing
2004 income or deductions into 2005 or by accelerating 2005 income or deductions
into 2004.
Other valuable tax information specific to healthcare
professionals can be found on www.mdtaxes.com. The MDTAXES Network is an affiliation of CPAs
throughout the country that specializes in the tax planning and preparation for
young health care professionals.
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Source : http://www.prweb.com/releases/2004/12/prweb188018.htm