Now that the tax season is almost over for 2008 taxes (for individuals at least!), I was talking to a CPA friend of mine about what we can do for the 2009 taxes???

He was giving me some recommendations (…in fact, some intuitive recommendations) as to what we should be doing for any of the tax years. Yet he didn’t fail to mention that it is actually quite common among most people not to follow these intuitive measures to save and do their taxes without any trouble when the time comes to file.

• If you have any changes in your life such as buying a house, getting married, having a child… it all affects your tax status. So best thing you would do is to keep track of these expenses.
• You should keep track of your business expenses
• Keep track of your stock sales as to record the bases of your stocks
• Make sure you get the receipt for your charitable donations
• Pay good attention to what’s going on with the economy. Due to recent economic conditions, tax codes can change for your advantage (or maybe for your disadvantage)
• Before buying a business, selling a business, buying a house, selling a house, even to set up a business, talk to a professional
• You should pay particular attention to AMT (Alternative Minimum Taxes)
• If you are a first time home buyer during 2009, you should really take advantage of the credit. And further more, you may even take this advantage in your 2008 taxes rather than 2009 taxes
• If you are going to start a new business, you need good record keeping, accounting system, you may need internal controls (depending on the business that you are starting), you also need to determine what type of an entity you want to be (LLC, C Corporation, S Corporation, etc), and take advantage of the early write-off of the equipment

Just to summarize the whole conversation, it simply is getting to be a complicated and burdensome process to do your taxes. You should start associating with a tax professional and ask for advise before you do major purchases or in the even of major life-changes. And further more, you should also start associating with a financial professional to determine how taxes will affect your investments, savings, as well as your estate.

Gurhan Demirkan

Bishop Financial Group