Too soon for 2005 tax planning? No way!

Lewis Braham of Newsweek updates readers on tax tips worth considering before year-end. High on his list: the elimination of the 50% ceiling on charitable contributions this year for the extra-generous, use of state sales tax (purchase car, boat, jewelry, etc.) in lieu of income tax this year for nine states (including Tennessee :)), use of combo of low capital gain rates (5%) and annual exclusion ($11,000 per donee for each donor) to start a gifting program toward reducing your future taxable estate. A concern, at least for now: the alternative minimum tax exemption goes away in 2006--if this is not changed, many middle income people will feel the wrath of the AMT. Additional issues include the higher-education deduction (or instead the lifetime learning credit) and use of traditional IRA contributions.

Not every tax expert would list these specific items, but virtually all would agree that using some planning now can reduce taxes (or increase your refund) next April.