Posted on April 26, 2006 at 16:50:49:
Surprise: it’s not too soon to start planning next year’s finances and to take advantage of tax-saving opportunities.
Check over your 2005 tax return to identify any carryovers that can save you money on next year’s return: capital-loss carryovers that can offset capital gains, net operating losses, investment interest expense, charity deductions and any tax credits.
Note that you can stash away more in your retirement plan this year. Max out your 401(k) to $15,000 or $20,000 for those over 50. Make your IRA contribution early to get extra months of tax-favored interest; that extra interest will be compounded over the years. Maximize your flexible spending accounts, too.
Do you plan to shift income-producing assets to family members in lower tax brackets – i.e., your children? Do it early in the year and the tax savings start right away. The annual gift tax exclusion is up to $12,000 this year, $24,000 giving with a spouse.