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Tax Tips Newsletter
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November 2007 - Vol 2, Issue 8
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Greetings!
Cornucopia

Best wishes for a happy and healthy Thanksgiving. Our office will be closed both Thursday and Friday.

It's time to do year-end tax planning. If you have had some significant financial events this year or would like to have a projection done before year end, please call the office.

Financial Goal in Color
An important part of year-end tax planning is a review of your investments, with an eye to making moves before December 31 that will cut your 2007 tax bill.

This year, your year-end investment tax planning must take two upcoming changes in mind. Here are the two changes:

* Beginning January 1, 2008, the tax rate on qualifying dividend income and long-term capital gains goes from 5% to 0% for taxpayers in the bottom two regular tax brackets (10% and 15%).

* In 2008, the "kiddie tax" expands to cover children up to age 19. For full-time students, the age limit will be even higher - up to age 24. (The current age limit is 18.)

Some strategies you should consider if these changes affect you:

* If your income puts you in the 10% or 15% tax bracket, you may want to postpone planned sales of long-term investments until 2008.

* If your children's investment income may be taxed at your highest rate next year due to the kiddie tax age limit change, you may want to accelerate sales of long-term investments held in their name into 2007 if the kiddie tax won't apply this year.

For guidance in minimizing the tax bite these changes could have on you, give me a call.
50s and 100s
Donating property to charity can be a good way for you to help the less fortunate while you cut your own tax bill. Be aware of the advantages and disadvantages of donating property to charity.

Here are some suggestions if you're planning to donate property.

If the property has declined in value since you bought it, sell the property and donate the cash to charity. You may get both a deduction for the contribution and a tax loss on the sale of the asset. If you donate the property directly to a charity, you will not be allowed a loss on the disposition. For example, if you sell stock for $4,000 that cost you $7,000, and then donate the $4,000 to charity. You will be allowed a $4,000 charitable deduction, and you are also entitled to a $3,000 loss on the sale of the stock.

On the other hand, if you have stock that has appreciated in value, you may want to donate the stock before it is sold. Let's say you bought stock two years ago for $7,000 and today it is worth $9,000. If you donate the stock to charity, you will have a charitable deduction for the full $9,000, but you will not be required to pay taxes on the $2,000 gain.

As with all tax planning, there are many factors to consider when donating various types of property. Please contact us before you undertake any sizable transaction.
Financial Navigation
The Tax Tip of the Week this week has some additional year end to-dos for individuals.

The Business Tip of the Month deals with how to compete against a larger competitor.

The Financial Tip of the Month asks whether or not zero percent credit cards are a good deal.

The Fraud Tip of the Month deals with a new check cashing scam that is going around.

Photos © Bigstockphotos.com

Sincerely,
Linda Heineman
Linda L. Heineman, CPA, CITP

phone: 626-577-0979
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