Tax Planning Actions to Be Taken by December 31

The following checklist represents a list of actions that must be taken by the end of the year if a taxpayer wants to take advantage of the opportunity for the 2003 tax year.

This is not blanket advice for everyone, contact us before taking any action so that we can evaluate your individual circumstances!

1. Complete regular tax projection

2. Complete AMT tax projection

3. Make final state and local estimated tax payments (unless in AMT posture) early rather than waiting until January 2004

4. Consider making January mortgage payment early

5. Ensure all charitable gifts are made before year-end, consider gifting low cost basis, appreciated securities

6. Realize capital gains or losses as appropriate (for example, post-May 5, 2003 net long-term capital losses may offset pre-May 6, 2003, net long-term capital gains)

7. Make family gifts (up to $11,000 per recipient, gift tax-free), try to ensure checks are cashed by year-end

8. Consider additional contributions to 401(k) and other qualified retirement plans or IRAs to maximize allowed deferrals – including catch-up contributions allowed for taxpayers aged 50 years or older by end of year

9. Make contributions to Code Section 529 education savings plans for potential state tax savings and to Coverdell Education Savings Accounts (ESAs) – deadline for Coverdell ESA contributions is April 15, 2004

10. Consider making payments toward 2004 tuition and expenses

11. Ensure medical and dependent care expenses are sufficient to exhaust health and dependent care flexible spending account balances – if not, consider scheduling routine medical, dental, and eye exam appointments

12. Purchase depreciable business equipment (including off-the-shelf computer software) to take advantage of increased expensing allowance

13. Purchase vehicles to be used in trade or business

14. Purchase a clean-fuel vehicle before expiration of full deduction allowance (phase-out of deduction under Code Section 179A scheduled to begin in 2004, but may be extended by legislation)

15. Make qualified environmental remediation expenditures before expiration of expensing provision under Code Section 198 (may be extended by legislation)

16. Amend post-September 10, 2001, income tax returns to take advantage of previously forgone bonus depreciation and/or to elect half-year depreciation convention

17. Amend income tax returns to make automatic for non-accrual experience method accounting method changes

18. Amend split-dollar life arrangements