How can I reduce my 2007 taxes - Gift-giving

Take advantage of the 2007 annual and lifetime gift-giving limits to reduce your income and estate tax liabilities. For 2007 and then again in 2008, you can transfer $12,000 per person, per year, without paying gift tax on the amounts transferred.

Married couples can gift $24,000 per person, per year without tax liability on the amounts transferred. That strategy not only avoids the possibility of paying a hefty estate tax later, but it removes earnings from those gifts from your taxable income bracket into that of the lower-bracket gift recipient.


Answer Provided By Andrew Taylor, CPA - Haffley, Taylor & Company

How can I reduce my 2007 taxes _ Retirement planning

Year-end planning for 2007 also involves maximizing annual contributions to your retirement plan accounts, since one year's limit cannot be added to the next year's if not taken in time. While contributions to IRAs may be applied retroactively if made before the filing deadline, an individual's elective deferral contribution made as an employee to a qualified plan must be made before the end of the calendar year.

Maximizing contributions to your retirement plan (or plans) before year end also allows you to reduce your adjusted gross income in direct proportion to those contributions. This in turn can give you the benefit of increasing the deductibility of medical and other deductions subject to adjusted gross income floors.

It is also not too early to think about a Roth IRA conversion plan if your present adjusted gross income is too high under the usual conversion rules. Although the adjusted gross income limit is not lifted until 2010 for a one-year only conversion opportunity, certain year-end maneuvers now can better set you up for maximizing conversion benefits in 2010. For example, if leaving employment, you may want to consider rolling over 401(k) balances to an IRA rather than leaving it in the plans.

Answer Provided By Andrew Taylor, CPA - Haffley, Taylor & Company

I am Self-Funding, do I sitll need a Business Plan?

Absolutely! A business plan is not just an exercise for a banker. It is a concise roadmap for your business. Even if no one else reads it, the process of answering the tough questions, and putting your ideas on paper is valuable for every business owner.

Not sure how to get started? Consider a class or book to give you the basics.

Answer by Lorraine Ball - Roundpeg