Since for individuals income tax system is generally a calendar year system, the end of the year presents opportunities for tax planning. Here are some ideas for consideration (but please consult with your tax advisor before undertaking any to confirm it makes sense in your specific situation):
-Sale of capital gain and capital loss properties to (a) offset each other, and (b) avoid limitations on deductibility of capital loss property
-Defer income until 2006
-Avoid or reduce penalty for underpayment of estimated tax by increasing income tax withholding on wages and pension/IRA distributions
-Increase your basis in partnerships and Subchapter S corporations to allow deductibility of losses
-Set up a qualified tuition program (529 plan) – this allows for tax-free earnings accumulations and tax-free distributions if used for qualified higher education expenses
-Minimize Florida intangible taxes through conversion of assets to nontaxable assets or use of swing trusts
-Make annual exclusion gifts of $11,000 per recipient to reduce estate and gift taxes
-Set up a retirement plan
-Make expenditures that qualify for Section 179 $105,000 business property expensing option
-Accelerate deductions (e.g., pay union or professional dues, preparing professional subscriptions, etc.)
-Sale of capital gain and capital loss properties to (a) offset each other, and (b) avoid limitations on deductibility of capital loss property
-Defer income until 2006
-Avoid or reduce penalty for underpayment of estimated tax by increasing income tax withholding on wages and pension/IRA distributions
-Increase your basis in partnerships and Subchapter S corporations to allow deductibility of losses
-Set up a qualified tuition program (529 plan) – this allows for tax-free earnings accumulations and tax-free distributions if used for qualified higher education expenses
-Minimize Florida intangible taxes through conversion of assets to nontaxable assets or use of swing trusts
-Make annual exclusion gifts of $11,000 per recipient to reduce estate and gift taxes
-Set up a retirement plan
-Make expenditures that qualify for Section 179 $105,000 business property expensing option
-Accelerate deductions (e.g., pay union or professional dues, preparing professional subscriptions, etc.)
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