Clicking on the "EXIT" button on the actual 2008 Tax Planning Guide will take clients back to your site.

 

 

A Comprehensive Approach

It’s smart to approach your tax planning effort from several directions. On the income side, your focus might be to find ways to defer taxes on your income or to have income taxed at a favorable rate. As for expenses, you can look for ways to reduce your taxable income by increasing deductible expenses.

Deductions consist of either a standard deduction set by the IRS annually or itemized deductions, which are specific actual expenses. You can deduct the larger of your standard deduction or your itemized deductions.

Many tax return computations and limitations are based on the amount of your adjusted gross income (AGI) for the tax year. Because adjustments — also called “above-the-line” deductions — reduce AGI, they are generally preferable to itemized deductions of the same amount.

Examples of above-the-line deductions: alimony paid, deductible IRA and self-employed retirement plan contributions, health savings account (HSA) contributions, and self-employed health insurance premiums.

The IRS requires most individual taxpayers to pay their income taxes during the year by making quarterly estimates or through wage withholding. Penalties are assessed when inadequate or untimely payments are made.
   
   
 
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