As the holidays are quickly upon us, I’m sure the last things you are thinking about are your taxes. But taking a moment to assess your tax situation NOW could pay off big in 2010. Here are some year-end tax tips that could drastically change your tax situation.

Tips for Business Owners:

• Get Current. One of the most important tax tips I can give is to make sure your accounting is up-to-date. It is important that you have a complete understanding of your financial situation. Scheduling a year-end planning session with your accountant is a good idea and a good start.
• Procrastinate. I know this may sound crazy, but hear me out. If (and only if) your cash flow can sustain it, then wait until January to bill those end of the year clients. Any cash you receive in December must be included on your 2009 tax return as income, but if you wait just a few more days you can defer payment of taxes on that income for another year.
• Shop ‘til you drop. Purchase items that your business will need in the near future. Again this is if your cash flow permits. Some things you should consider are office supplies, equipment purchases or pay some bills early (i.e. business cell phone bill, utilities, etc). This year the sales tax and excise tax charged on qualified motor vehicle purchases is deductible.  So if you are in need of a new vehicle, it would be beneficial to do so by year end.
• More blessed to give. We’ve all heard the saying, “it’s more blessed to give than to receive”. And it’s true in more ways than one. Push an early 2010 charitable donation back to 2009, which allows you to take the deduction in 2010 instead of waiting until 2011. Be sure you get a receipt to support the tax deduction.
• Sock it Away. This is a great time to make payments to your retirement plan or setup one to reduce your business income before the year ends. Meet with your financial planner to verify the contribution limits and deadlines.

Tips for Individuals:

• Job-related moving expenses
• Job-skill improvement classes (including travel)
• Professional and investment publications
• Union or professional dues
• Job-hunting expenses (including travel)
• Child care expenses
• Home office deduction – working from a home-office
• New or used clothes, toys, and household goods given to charity
• Fees for tax or investment advice and tax return preparation
• IRA fees
• Client gifts

Note: These year-end tips will apply differently to each individual’s situation and accounting method. Seek professional advice to determine the best strategy for your transactions for tax purposes.

If you live in GA, you’ve probably heard it all over the news…not to mention the sales papers.  Today, July 30, 2009 starts the Sales Tax Holiday.   Certain items purchase through Sunday, August 2, 2009 are exempt from sales tax.  For many items like computers and related accessories, this can be a huge savings.  While saving $1.40 on a $20 purchase of pens, pencils and paper, might not be worth standing in line for an hour. 

Please know that with all good things, there are rules and exceptions to the rules (the tax code is full of exceptions).   Check out the list of  exempt items before heading to the store.  Happy Shopping.

Don’t panic…..you have options! The first piece of advice I would give is do not ignore the IRS. Contrary to what many people think, they will work with you. The IRS does not want to take your car, house or seize your bank accounts. They want you to pay your taxes.

Therefore, if you cannot pay, you can make payment arrangements. The IRS will allow you to pay your balance off in monthly installments. As long as you make your monthly payments as scheduled, they will not bother you.

Here’s how it works.  You determine how much you will be able to pay each month and what day of the month you’d like your payment to be due.  You then submit this information to the IRS and they have the option to approve or deny your installment.  However, most installments are approved.  Others are slightly altered.  If the payment amount you are requesting is too low, they might suggest you pay more.  Keep in mind, when requesting an installment agreement, make sure you request a monthly payment you can afford. It is better to pay more than less. If you miss a payment or pay less than your scheduled amount, it forfeits the installment agreement. If that happens, you will have to setup another installment agreement. Although, setting them up is not difficult, they are not free.   Each time you have to setup an installment agreement there’s a fee.

You can request an installment agreement online, over the phone or by completing Form 9465 and mailing it in.

I know taxes are not high on the list of most romantic subjects, but when you and your sweetie are thinking about tying the knot you should definitely consider the tax consequences. So, be sure to add tax planning to your wedding to do list. 

I have found that many taxpayers do not realize that when you get married, (no matter what date) you are now required to file a married return. I know there are tax preparers out there that will tell you otherwise but I am not one of those. The tax code says a taxpayer’s marital status on the last day of the year determines their filing status for the entire year. Therefore, whether you get married in June or December, you still have to file a married tax return for that tax year. (The same holds true if you get a divorce.) Remember your filing status for tax purposes is determined by your marital status on the last day of the year.

We at By The Book Accounting we do your taxes the legal way. If you want your taxes done “right” give us a call. All others need not apply.

With the uncertainties of the economy, many Americans are finding themselves looking for ways to cut back.  Some are driving less to save on gas.  Others are cooking more at home to cut down on the expense of eating out.  Those are all very good ways to cut back.  I’d like to suggest another way to increase what you bring home….or as this post is titled….GIVE YOURSELF A RAISE!

Listen to this 15 minute interivew and let me know if you learned something that help you give yourself a raise!

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