Happy Holidays - Are you ready for next year?

Happy Holidays everyone! As the year draws to a close, and we are all reflecting back over this year and forming New Year's resolutions, it's also time to think about how to report your income for your taxes. Preparing your income taxes can be a daunting task, and we would love to help you. We have provided a few tips to help you maximize your return this year.

If you can move quickly, you can use some basic tax planning tools to reduce your 2009 business and individual income taxes. Here are some ways to save on this year's tax bill:

1. Defer Income:
If possible under your accounting method, delay the receipt of payments you are owed until after the new year.

2. Increase Business Expense:
Buy items for your business this year, with credit cards if necessary. That way you can maximize your deductions for this year. You can buy office supplies and equipment and pay some of your business bills early, such as phone service, utilities, insurance, rent, and professional subscriptions. Individually, you can pre-pay your mortgage to increase your itemized deductions.

3. Contribute to a Retirement Plan:
Make an extra contribution to your retirement plan before the end of the year.

4. Make Charitable Contributions:
donate to your favorite charity by the end of the year if you have not bumped up against the charitable contribution limits. If you have an estimate of what you have already given in 2009, we will be glad to advise you on whether or not it would be worth it to make additional donations.

5. Prepay your State and Local taxes:
If your cash flow allows it, prepay state and local taxes before the end of the year.

6. Sell stocks with lost value:
This year has been a tenuous year for the stock market. If you have stocks that are below the value you purchased and do not look like they will gain value in the foreseeable future, sell them before the end of the year. You are able to write off a loss of up to $3,000 of capital loss on your taxes and carry forward additional losses. Remember also, losses in any amount will offset any capital gains.

Information taken from Tax News,Fall 2009, published by NSTP.