Another Year Bites The Dust

It is New Year's Eve and goodbye 2011. Time to get ready for 2012 to poke up its head and begin a New Year. With that, tax filing is around the corner. What can you do today to help come April?

First, and easiest, tomorrow morning write down your car's odometer reading. Subtract the number you wrote down last New Year's and you have the total miles you drove for the year. That will help determine your auto deduction come April. If you didn't write down last year's number, you are now set for next year.

Second, pay any January business expenses you may have. Or buy the equipment that you need for your business today. Make a donation to your favorite charity. Any payments charged to your credit card today will be deductible on your 2011 tax returns.

Keep checking back to my blog as I will have helpful hints/rumor busters for your 2011 tax returns. As always, please do not hesitate to write or call if you have any questions. I am here to help.

Alternative Minimum Tax (AMT)

AMT affects an increasing number of taxpayers, especially in high tax states like California. AMT provides for a separate calculation of income tax liability by adding back to income certain common deductions, called "preference items". Common items such as state and property taxes, medical expenses, certain interest on lines-of-credit, business related items, large capital gains and employee business expenses are common preference items that can throw a taxpayer into AMT.

It is difficult to determine which combination of factors will make you subject to the AMT. But it is best to estimate these before the end of the year, since normal year end planning will change if AMT is rearing its ugly head. Please contact us to assist in determining if AMT will affect you before it is too late.