Make these moves now

The world of achievement has always belonged to the optimist.

– Harold Wilkins


Some weeks are harder than others.

That’s why I make it a point every week to sit down and write to you–to lift your eyes, to remind you of what’s possible…and, in the doing, it does wonders for *my* state of mind.

Yes, even I can fall prey to the Daily / Weekly Blues.

But when I remember the families we get to walk with–through hard times, and good–I get a shot of energy. When I think about the businesses we guide through the morass of this economy…well, it makes every week worthwhile.

Tax time blues are all-too-common as well. But getting a “surprise” in March or April is 100% avoidable. Half of that task is complete when you work with the right professional [check!]; but the second half is to ensure you move NOW, when you still have time to set things up right.

A few good moves to make, right now, are below.

“Real World” Personal Strategy

End-of-Summer Moves To Make

The tax cuts we’ve all been enjoying for almost a decade are set to expire at the end of the year. That’s the bad news.

Worse: Although some of the provisions, such as the 10 percent tax bracket and the $1,000 child tax credit, have a good chance of living beyond 2010, some of my clients will likely owe Uncle Sam more money next year–unless they do something about it. This is particularly true if you’re in the highest tax bracket, scheduled to go from 35 percent to 39.6 percent. Also slated to increase are the tax rates on capital gains, currently at 15 percent for most investors.

Move #1: If you fall into this category, accelerate income into this year so you’ll owe taxes on the money at today’s lower tax rates. Talk to your employer about moving any bonuses or commissions into 2010. It’s also an ideal time to cash in some long-term winners in your portfolio so you can take advantage of today’s lower capital gains tax rates.

Next, anyone, regardless of income, can convert a traditional IRA to a Roth. Even better, the government is encouraging us to convert by allowing us to pay the tax on this money over two years — 2011 and 2012 . But if you decide to postpone any tax bill, remember the likelihood of higher rates in 2011 and beyond. Another impending tax, the Medicare tax on high earners, also has created more incentive to convert to a Roth. This tax is part of the health care reform law and will apply to investment income of higher earners starting in 2013.

Move #2: Sit down with us, and let’s explore whether moving to a Roth is right for you. We’ll run the numbers to determine whether you should pay all your Roth conversion taxes this year at lower rates–or sit tight. This could make a big difference, depending on the rates.

I like tax credits over deductions for my clients. That’s why the next move for you should be in your home. Because: Good ol’ Uncle Sam wants to help, if your upgrades are energy-efficient.

It’s part of the “stimulus bill”, and it won’t always be the case; right now, common energy upgrades such as installing storm windows and doors, adding insulation, and buying a new energy-efficient air conditioner or heat pump, could get you a $1,500 credit when you file your tax return.

Move #3: Pull the trigger on those long-put-off improvements. You do have a few months, as this tax break is good for improvements made through the end of the year. Be careful, however, if you claimed the maximum credit on last year’s return; this tax break is limited to a total $1,500 claim, not that amount every year.

There are more moves to make–but they depend on your particular situation. It would delight me and my team to no end to have the chance to set you up for paying the least amount of taxes possible for 2010…so, let’s do something about this, shall we? Give us a call now to set up your appointment!

I’m personally dedicated to the success of your family–and to your finances! Can other tax professionals say that?

Pam BritzMake these moves now