We're all familiar with Cinderella's story. Her fairy godmother turned a pumpkin into a gorgeous carriage to take her to the ball -- with a strict warning to be home by midnight, lest the carriage turn back into a pumpkin!
Tax planning works the same way. That's because at midnight on December 31, some of the most valuable tax breaks turn into pumpkins. In some cases, you miss the chance to take advantage of them this year. In others, they expire entirely and you lose them forever.
In recent years, Washington has made taxes even more complicated than usual. Strict budget rules mean that new breaks come and go. This year, there are 22 tax breaks expiring on or near December 31. Some of them may be renewed before the end of the year. But it still makes sense to look at them now to make sure you don't lose anything the law offers:
* The deduction for sales tax you pay to buy a new car or truck
* The "First-time Homebuyer" tax credit (this one actually expires November 30, although it may be extended)
* The itemized deduction for state and local sales taxes (as opposed to income taxes)
* The special deduction for state and local property taxes for clients who don't otherwise itemize
* The $4,000 deduction for "qualified tuition and related expenses"
* The increased exemptions for calculating the dreaded alternative minimum taxable income
* The $100,000 exemption for IRA distributions paid by the trustee directly to a qualified charity
Several valuable business tax deductions also expire this year:
* The 50% "bonus depreciation" for new business equipment
* The expanded "first-year expensing" dollar limit of $250,000 (which drops to $125,000 in 2010)
* Accelerated depreciation benefits for certain tangible assets (including "qualified leasehold property," restaurant property, retail space improvement property, and "qualified machinery and equipment" used in farming businesses)
* Expanded first-year depreciation benefits for business vehicles
* Special credits for "COBRA" continuation subsidies for laid-off employees
None of us want to miss any of these breaks. But the only way you can be sure not to is to ask! If you're worried about missing valuable deductions -- especially if you own your own business -- call us. And if your friends, family, and colleagues are worried, have them call us too!
Tim Pinkelman, CPA
Accounting Center & Tax Services, Inc.
6601 Lewis Ave.
Temperance, MI 48182
419-882-9255 or 734-847-0400
Toledo Area CPA / Full service tax and business consulting / Accounting Center
Tax planning works the same way. That's because at midnight on December 31, some of the most valuable tax breaks turn into pumpkins. In some cases, you miss the chance to take advantage of them this year. In others, they expire entirely and you lose them forever.
In recent years, Washington has made taxes even more complicated than usual. Strict budget rules mean that new breaks come and go. This year, there are 22 tax breaks expiring on or near December 31. Some of them may be renewed before the end of the year. But it still makes sense to look at them now to make sure you don't lose anything the law offers:
* The deduction for sales tax you pay to buy a new car or truck
* The "First-time Homebuyer" tax credit (this one actually expires November 30, although it may be extended)
* The itemized deduction for state and local sales taxes (as opposed to income taxes)
* The special deduction for state and local property taxes for clients who don't otherwise itemize
* The $4,000 deduction for "qualified tuition and related expenses"
* The increased exemptions for calculating the dreaded alternative minimum taxable income
* The $100,000 exemption for IRA distributions paid by the trustee directly to a qualified charity
Several valuable business tax deductions also expire this year:
* The 50% "bonus depreciation" for new business equipment
* The expanded "first-year expensing" dollar limit of $250,000 (which drops to $125,000 in 2010)
* Accelerated depreciation benefits for certain tangible assets (including "qualified leasehold property," restaurant property, retail space improvement property, and "qualified machinery and equipment" used in farming businesses)
* Expanded first-year depreciation benefits for business vehicles
* Special credits for "COBRA" continuation subsidies for laid-off employees
None of us want to miss any of these breaks. But the only way you can be sure not to is to ask! If you're worried about missing valuable deductions -- especially if you own your own business -- call us. And if your friends, family, and colleagues are worried, have them call us too!
Tim Pinkelman, CPA
Accounting Center & Tax Services, Inc.
6601 Lewis Ave.
Temperance, MI 48182
419-882-9255 or 734-847-0400
Toledo Area CPA / Full service tax and business consulting / Accounting Center
