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Year end tax planning is very important. It is always a wise decision to start looking at your 2003 income tax while you still have time.
Try some of these tax-cutting ideas:
Check income:
Deferring income may have the added benefit of qualifying you for other income-sensitive tax breaks (i.e. child and education credits). However, planning is important, since some of these benefits can trigger the alternative minimum tax.
Review deductions: Consider the advantage of bunching your deductible expenses every other year. You can alternate between itemizing one year and taking the standard deduction the next, saving
tax dollars by doing so.
Bunching means accelerating or delaying payment of deductible items, such as property taxes, medical expenses, and gifts to charity, to have the bulk fall in the itemizing years. Be sure your planning
in this area takes into account the limitation on itemized deductions for higher income taxpayers.
More deductions: Consider using your credit card to pay expenses and miscellaneous itemized deductions before December 31. The IRS considers the items paid for when your credit card is
charged, regardless of when you pay the credit card company.
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