Friday, December 02, 2005

Get Ye to a CPA (or EA or Tax Attorney or Tax Service)

Most people do not start thinking about contacting their tax preparer until late January at the earliest, but this often is a good time to have a pre-season meeting. First of all, there may be financial decisions with consequences that need to be made before December 31, such as: does it make sense to double up on mortgage payments, property taxes or charitable contributions to qualify for itemized deductions or should I give cash or the family pool table to the church's new recreation center. Secondly, if you have significant non-wage income, it may be important to make an estimated tax payment by January 17. Third, tax experts generally have more time to listen now if you have concerns about an unusual transaction. Fourth, they may be able to give you ideas on how to organize your records to help save their time and your money later (billing rates for professional tax preparation aren't cheap). Finally, they may point out new deduction or credit opportunities based on developments during the year; two examples might include moving expense deduction if you relocated to another city or credits available if your daughter is finishing her first semester at Central Tech University (a hypothetical institute of higher learning).


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