Planning Now Can Save Money on April's Taxes
Oct. 21, 2006: The Seattle Post-Intelligencer
Summary: It’s not too early to start thinking about tax strategy, even if April seems like a long way off.
That’s because claiming certain exemptions, deductions and credits generally requires action before the end of the year. And recent changes in income tax law, including those wrapped into the newly enacted Pension Protection Act, may prompt some taxpayers to rethink retirement savings, charitable giving and college savings plans.
Tax experts say that the first thing people should do is to take stock of what their income is this year compared with last year. They also should look at anything likely to change deductions, such as the birth of a baby.
"Pull up last year’s return and see if things are going to be significantly different," said Rande Spiegelman, vice president of financial planning at the Schwab Center for Investment Research. He noted that some tax preparation software allows users to project tax liabilities.