You can be working on your 3rd quarter estimated tax payment due on September 15th--does it need to be revised up or down? What income do you have that needs to be covered by these estimated payments?
Do you only have withholding from your salary? Then do a projection of your tax liability and determine whether you have the right amount being paid in through withholding. Too little and you can be hit with a penalty. Too much and you are giving the government an interest free loan.
The year is two-thirds over and now is a good time to do some tax planning. As I wrote in an earlier post in June, Take your money in 2010, you may wish to accelerate income into 2010. Or plan for it if Congress doesn't extend the Bush tax cuts or pass some version of President Obama's proposed tax cuts.
If you determine this isn't the time to accelerate income, you may want to consider all the normal tax planning items:
- If you have capital loss carryovers from the past couple of years and some unrealized gains in your portfolio, it may be worth cleaning up your portfolio to bring it where you want it to be as an investor. If the loss carryovers offset any potential gains you can rebalance your portfolio without any negative tax consequences.
- Determine your charitable giving strategy for the year and plan on giving before December 31
- For those with businesses, take advantage of the increased expensing limit for acquisition of furniture, machinery and equipment under Section 179 of the Internal Revenue Code. Again for 2010, the limit is $250,000 with limitations for those who purchase qualifying fixed assets over $800,000 and for those who do not show a profit in that business.
- Consider deferring income and accelerating deductions where possible.
- Energy credits are still around for 2010, so consider installing qualifying windows or HVAC systems.
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