Gerald Kramer
The AZ CPA
4531 N 16th St
Suite 126
Phoenix, AZ 85016
(602) 264-9331
Fax: (602) 279-1766
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TAX TIPS
August 2003 Newsletter Nine Tips to Save Taxes
- Retirement Account investments - Consider changing the asset allocation into bonds, REIT and mutual funds that have a high turnover. These are the types of investments not subject to the new cap rate. Do not stop contributing to a retirement because of the new law...especially of your employer matches it.
- Taxable accounts - Consider moving income-producing assets from bonds to stocks. Also, consider tax managed mutual funds, high dividends stock funds with low turnover and or municipal bond funds. Review the yeilds as well as you overall asset allocation before you make any changes.
- Gifts to children or grandchildren - Consider gifting to shift to lower brackets. You can transfer $11,000 to each person ($22,00) if a spouse joins in the gift.
- Adjust your withholding - Consider adjusting your withholding your withholding taxes. There are new withholding rates that have been published (reduced taxes for the Feds and increased for the state.) A caution here is to be sure that 90% of your 2003 tax is paid by January 15 or you could be subject to penalty.
- Estimated tax payments - For those who do not have withholding or not enough to cover their tax bill, consider reducing estimates. The same caution as above applies.
- Accelerate income - Consider accelerating income into this year. Tax rates may never be lower and the rates could go up after the next election.
- Be sure to consider the new child tax credit. There will ne a prepayment of the increased credit for taxpayers that claimed children last year.
- The marriage penalty has been removed for 2003 and 2004. If marriage is inyour plans, it could be advantageous to consider expediting the ceremony.
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