Ben Franklin may have been right that “in this world nothing is certain but death and taxes” – still, you can improve your odds on one with healthful living and you can time your hits on the other with J. K. LASSER’S savvy advice on year-end tax planning
What should I shoot for?
First, figure out whether your tax rate will be higher next year or this year.
- Could be due to income variations – up from a new job, promotion, bonus or investments, or down from unemployment, going back to school, maternity leave, whatever.
- Or because of deductions and exemptions going up from the good news of a new house or baby or down from the bad news of medical expenses or storm damage.
Next, even out the taxable income by moving income into, and deductions out of, the low tax year. Or shift income out of, and deductions into, the high tax year.
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