Getting ready for April's tax deadline
The income-tax deadline is less than five months away. But plying some year-end tax planning tactics now may greatly reduce your tax bill - or land you a nice return - come spring. The following are some strategies to consider before the new year, according to KPMG, an international provider of information services.
*Take capital losses this year to offset any capital gains, thereby lessening your capital-gains tax. If you have more losses than gains, you can then use up to $3,000 of those losses to offset your ordinary income.
*Make charitable contributions by Dec. 31, 1999.
*Shift as many itemized deductions as possible from next year to this year. Do this only if it enables you qualify for a tax deduction in 1999. For example, make your Jan. 1 house payment this year to be included in 1999 taxes.
*Maximize contributions to tax-deferred retirement plans.
*If you have your own business, consider establishing a Keough account by Dec. 31, 1999. The Keough is like an IRA for self-employed people, and must be established during the tax year. An IRA, however, can be established up until April 17, 2000 to qualify for a deduction this year.
*Avoid mutual-fund purchases until after the fund makes its year-end dividend distribution.
(c) Copyright 1999. The Christian Science Publishing Society