Year-End Tax Savings
With less than a week to go in this year, there is still a little time left to reduce your tax bills. The normal strategy of delaying taxes by postponing the receipt of income until next year and accelerating (prepaying) deductions is even more important this year because the tax rates will actually be dropping a little next year, as part of the ten-year tax reduction plan. It’s not a big reduction, but at least it’s a step in the right direction.
You can see the 2002 tax rates on my website and compare them to the 2001 rates if you want.
One excellent way to save on your taxes is to prepay your tax preparation fee by December 31 so that you can deduct it on your 2001 tax return. Check with your preparer; but most of us gladly accept large prepayments. It won’t actually cost us anything in taxes because we just spend the money immediately on supplies and software for the upcoming tax season.
KMK
Tax Guru - Ker$tetter Letter 