Time is running out to get your tax planning in order.
There are only two days left to make those last minute contributions to charity or convert your retirement accounts.
"It's kind of late," said Rick Evans, a partner with Serotta, Maddocks, Evans & Co. "But, I guess, it's not too late."
Already, scores of taxpayers concerned about how much they'll owe Uncle Sam on April 15, 1999, have gone to their financial planers for advice, accountants say.
"We do a lot of tax planning during the month of December," Cherry, Bekaert & Holland accountant Beth Menger said. "We'll have people come in (today and Thursday)."
So if you hurry, there are few things you can still do.
Here are a few of them:
* Offset capital gains. Big gains during this year's record-setting stock market can be offset by dumping losers before Dec. 31.
* Give to charity. Charitable contributions to 501(c)3 organizations given in 1998 are tax deductible. Just make sure that the check is written before the end of the calender year.
Giving away stock or property is a good option, too. This way, you don't have to pay capital gains tax (neither does the tax-exempt charity when it sells the gift) and you can claim the donation as a deduction.
* Pay estimated state income taxes early. The self-employed who itemize their federal tax returns can pay their estimated state income taxes early -- in December instead of January so they can get the benefit of the deduction on their 1998 taxes, instead of 1999's.
Also, if you didn't pay your estimated capital gains taxes, you have to do it before the end of the year to avoid paying a penalty, accounts say.
* Convert standard IRAs into Roth IRAs. This year, and for this year only, the federal government will allow you to convert your standard Individual Retirement Account into a Roth IRA (named after Republican Delaware Sen. William Roth) and pay the taxes due on the conversion in equal increments over the next four years.
With a Roth IRA, participants pay income tax on what they contribute, but once the money is in the account it grows tax free. But after Dec. 31, taxes for any conversions will be due in one year, not four.
"It's a real sweet deal that will make a nice nest egg for a lot of people," said John Gillion, a certified public accountant with Baird & Co. "That's a pretty good thing."
Here are a few last-minute things to do to reduce taxes:
* Offset capital gains.
* Give to charity.
* Pay state income taxes early.
* Convert IRAs into Roth IRAs.
Frank Witsil can be reached at (706) 823-3352.
© 2016. All Rights Reserved. | Contact Us