Consult with your lawyer. Consult with your tax consultant. Consult with your insurance broker. So often, the radio experts or brokerage advisers punt the ball. I have no lawyer, no insurance broker and no tax consultant, although consulting with a CPA is becoming more likely. My tax advisor is the Wall Street Journal, blogs, Kiplinger and other magazines. Here's a short list of gathered tax advise.
General tax Advise:
- Do not purchase mutual funds near the end of the year. Around the end of each year, many funds distribute capital gains to investors. Consider waiting until after the date to qualify for the payout to invest in that fund.
- Donate stock to charities, as opposed to selling and taking the capital gains tax. It is a double whammy: a) you do not have to pay the capital gain tax b) you get to deduct the contribution.
- Be green - get green: energy tax incentives
- Visit your doctors and dentists in October. This allows you plan better your health care expenses, and thus your health case spending account contributions for the next year.
- Do not prepay state and local taxes if you suspect you are subject to AMT.
- Invest in AMT-free funds, which invest between 80-100% in municipals bonds and money-market instruments whose income isn't subject to the AMT.
- Defer income to next year.
- If you've previously shunned IRAs, the best move you can make between now and 2010 is to invest as much as possible in a Traditional IRA. Then, in just over three years, you'll have a nice sum you can convert to a Roth IRA, because of changes in the tax law. This past spring, Congress passed a new law that will make it possible for everyone -- regardless of income -- to convert their IRAs into a Roth IRA beginning in 2010. (see Suze Orman column)
- Avoid ADR (American depositary receipt) in your IRA as they are subject to foreign tax which you can not recoup.
Technorati: Tax IRS