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Contact:
Lois Whitehead, Public Relations Manager
212-719-8405
lwhithead@nysscpa.org

NEW YORK, NY, October 5, 2007 – The New York State Society of Certified Public Accountants recommends these Year-end Tax Tips for consumers:

1. Be Energy Conscious: Is your home green? If so, take advantage of a $500 tax credit for your energy conscious expenses. The credit is called the non-business energy property tax credit and unless Congress acts to extend this provision, it will expire at the end of the year. So what types of expenses qualify? First they must be made to your primary residence and assuming they meet certain energy conservation standard items such as insulation, exterior windows, and exterior doors will qualify for the credit (s)—even adding central air conditioning!

2. Do A Tax Projection: Before the stroke of midnight on December 31st, visit with your CPA to ask about the year-end tax planning moves here in this press release. By having a tax projection prepared, you will have several options for minimizing your taxes. For example, if you are subject to the Alternative Minimum Tax (AMT) and you pay quarterly estimated income taxes, typically it would be suggested to pay the 4th quarter estimated tax payment in January of 2008. With the AMT, state income taxes are not a deductible expense. For this and a myriad of other reasons, it is suggested that you have a tax projection prepared before the end of the year.

3. Review Your Income and Deductions: The most fundamental year-end tax move is to adjust the timing of income and deductions. If your income is high, putting off receiving more income at the end of the year can save taxes. For example, if you’re close to the line on itemizing deductions, accelerating payment of deductible expenses such as job hunting expenses or professional dues might save taxes. It should be noted that different itemized deductions are subject to different phase-out limits. For example, medical expenses are subject to a reduction of 7 ½% of adjusted gross income for regular tax purposes and 10% for AMT.

4. Postpone Income: If you are in line for a bonus, see if your employer will hold off writing the check until January. If you own a cash-basis business, you can time the receipt of income (defer receipt until January) by waiting near the end of the year to send your December billings. You can’t simply defer taxes by not depositing checks received in the bank. CAVEAT: If you expect to be subject to the Alternative Minimum Tax (“AMT”), consider accelerating income to the current year in an effort to mitigate the negative aspects of this tax.

5. Fund Your Retirement: Contribute to a deductible Individual Retirement Account (IRA), if you qualify. The investments grow tax deferred if it is a conventional IRA; tax-free if it is a “Roth” IRA. The contributions to a Roth IRA, however, are not deductible. You have until April 15 to open an IRA and make a deductible contribution for the prior year. If you have a 401K plan at work, make as large a contribution as you’re allowed to make. The self-employed have alternative retirement plans to consider, but some of them must be opened by December 31st. This money can grow to a substantial sum because it is compounded, over time, free of taxes. To maximize the growth of your annual IRA contribution, always make it at the beginning of the year. Remember that there are different maximum amounts to be contributed depending on whether you are over 50 years of age.

6. Pay Deductible Expenses before December 31: Paying your state income tax estimate before December 31 accelerates your federal deduction. You can also pay property taxes early, make an extra mortgage payment (the interest portion is deductible), pay your tax preparer for your year-end planning meetings or opt to have dental work or elective (deductible) surgery before the end of the year. (See the discussion of AMT which precedes this section.) If you are short of cash use a credit card. This is the same as using cash so the deduction is taken in the year the charge is incurred rather than the year you pay off the credit card balance.

7. Contribute to Charity: You can make cash contributions or charge them on your credit card and take a current deduction. If you give appreciated property to charity, in many cases, you’ll get to deduct the full market value. You may need an appraisal to determine the value of some property. This tax year brings new recordkeeping rules into play for cash contributions. You cannot deduct any cash contribution (no matter how small) unless you keep a record of the contribution (e.g. a bank record, a cancelled check, a bank copy of a cancelled check, or a bank statement) containing the name of the charity, the date, and the amount) or a written communication from the charity. This communication must include the name of the charity, date of the contribution and the amount.

8. Consider Gifts to Children: If you intend to make gifts to children (or other relatives), do it well before December 31st so that the checks clear. Gifts up to $12,000 per person need not be reported. In fact, you can give $12,000 in December and another $12,000 in January (the 2008 gift) for a total of $24,000 over the two months. If you skip making the gift this year (2007), there is no looking back. Each year stands on its own.

9. Offset Capital Gains: Review your investment portfolio to determine whether you should sell some “losers” before year-end in order to offset capital gains you’ve already realized. Capital losses are first netted with capital gains and then are deductible against ordinary income (limited to $3,000 a year).

10. Get Married or Divorced: If you are considering marriage, consider the tax effects of getting married in December as opposed to January. You are considered married for the entire year even if you get married on December 31st. Your new spouse’s income, or lack thereof, should be considered when doing any tax projections because the net effect can be significant. Many of the calculations in any income tax return are driven by the taxpayers’ marital status. Results will vary when considering the effect on the individual or on the couple.

For further tax and personal finance tips, visit the Sound Advice section of the Society’s website, www.nysscpa.org.

About the NYSSCPA

Representing 29,000 CPAs, the New York State Society of Certified Public Accountants (NYSSCPA) is the oldest state accounting organization in the nation.

Incorporated in 1897, the Society is a not-for-profit organization that seeks to establish and maintain high standards of integrity, honor, and character among certified public accountants.  Its members are CPAs working in public practice, industry, government and education in a state that serves as the home of Wall Street and major financial institutions.

The New York State Society of CPAs is located at 3 Park Avenue, New York, NY 10016.   To learn more about the Society call 800-633-6320 or visit the Society’s website at www.nysscpa.org.