Tip For Avoiding Year-end Tax Pitfalls
Investment advisors at The Zero Alpha Group produced a very good year-end tax planning conference call. Listen to it here, and you'll get details on ZAG's top four end-of-year tax pitfalls:
1) Blowing your bonus. Too many Americans spend their hard-earned bonus all at once on a luxury item and don’t consider how to apply a bonus to their financial plan in a smart way.
2) Giving gifts without an eye to cutting your taxes. Here’s something most people miss: Fully utilizing the annual exclusion for gifting amount ($11,000/$22,000 split gifting). You should think about moving money to children and grandchildren now if you have a potentially taxable estate.
3) Cluelessness on AMT. Here’s a really costly pitfall for the unwary: Not knowing what your tax situation is so that you are unable to assess whether or not you will be clobbered by the dreaded Alternative Minimum Tax (AMT).
4) “Playing Santa Claus