News from Clark Financial Services

Year End Planning

December, 2011

In This Issue

Year End Tips

Maximizing Tax Breaks

Standard Mileage Rates

Timothy J Clark CFP, EA

Year End Tips

Check your flexible spending account balance.

You must clean out your flexible spending account by Dec. 31 if your employer still has not adopted the 2 1/2 month grace period now allowed by the IRS. Otherwise, any money remaining in your account is forfeited.

Regular and Roth IRAs must be established by April 16, 2012 for 2011 deductions.

For 2011, you can still contribute up to $5,000 to a Traditional or Roth IRA ($6,000 if you're age 50 or older).

To be deductible for 2011, the contributions must be made by April 16, 2012. Note, a filing extension will not provide extra time to make a 2011 contribution.

Gifts to Charity

In the season of giving, you must receive a written acknowledgement for any single contribution of $250 or more to a charity before your 2011 return can be filed.

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Greetings!

The holidays are upon us and the new year (a/k/a the tax filing season) is closer than you think. Below are some final reminders for 2011 so you don't overlook some last minute moves before December 31.

Maximizing Tax Breaks

Visit our web site www.clarkfs.com

Traditionally, year end tax planning generally means bunching your deductions into the current year and deferring your income into the following year. The basic plan is to do what you can to reduce your current tax year hit. This is true for both individuals and business owners.

Make sure you mail checks for deductible items before the year-end to ensure a 2011 write-off. You get to claim the deduction in 2011 even if the checks don't clear until January.

If you are charging deductible items, make sure you understand that charges made on a retail store credit card, you are allowed to claim the deduction for the item only in the tax year in which you pay the bill. For transactions made with a bank credit card, you may take the deduction in the tax year that you charged the goods, even if the bill is paid in the following year.

2011 Standard Mileage Rates

The optional standard mileage rates to calculate the deductible costs of operating an automobile for business and other purposes are:

Purpose (Cents/Mile)	Rates 1/1 through 6/30/11	Rates 7/1 through 12/31/11
Business	51	55.5
Medical/Moving	19	23.5
Charitable	14	14

Beginning on January 1, 2012, the optional standard mileage rates will be 55.5 cents/mile for business miles, 23 cents/mile for medical or moving purposes and 14 cents per mile for charitable services.

Remember, you must maintain a contemporaneous written log of your mileage to substantiate your deduction.

Merry Christmas and Happy New Year from all of us at Clark Financial Services

Santa It's hard to believe that as 2011 comes to a close, we have been in business for over eleven years. We couldn't have achieved this accomplishment without you.

We look forward to working with you again as your trusted tax professional in the coming filing season.

We at Clark Financial Services would like to wish you a very Merry Christmas and that you have a prosperous New Year.

Cheers!

Timothy J Clark CFP, EA