With the year drawing to a close, time is running out to cash in on several tax-saving strategies for 2004. As you prepare to meet with your personal tax advisors and accountants, here are a few items you may want to consider:
n Is your portfolio's asset allocation in line with your time horizons and risk parameters? If not, rebalancing your investment mix may be necessary.
n Do you have any losses on securities that you would like to sell? You may have to realize these losses by Dec. 31 and be mindful of wash sale rules if you intend to repurchase the same or a substantially identical security.
n Do you know if you are subject to the Alternative Minimum Tax (AMT)? It is important to remember to calculate your estimated tax liability by year-end so you can possibly adjust your income and expenses.
n Do you have any deductible expenses for 2005, such as real estate taxes or business expenses, you can prepay in 2004?
n Moving income, perhaps from bonuses or self-employed wages, into 2005 may be something you may want to consider.
n Are you eligible for a Roth IRA conversion?
n If you are age 70 or older, have you taken your required distribution from your traditional IRA?
n Have you made a gift of up to $11,000 per child to a 529 College Savings Plan?
n Do you have appreciated stock you would like to give to a child or to any charities that you support?
n Are you a small-business owner who may be considering establishing a qualified retirement plan? Dec. 31 is the deadline to act.
Answering these questions now can possibly save you money later.
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Smith Barney does not give tax or legal advice. Please consult your tax and/or legal advisor for such guidance.
Smith Barney is a registered service mark of Citigroup Global Markets, Inc. Member SPIC. This article is based, in whole or in part, on information provided by the Planning Services Department of Smith Barney.