8 Year-End Tax Moves
 By Stephen A. Lanvil

The year’s almost over, and that means time is running out on tax savings for 2007. What can you as a small-business owner do to reduce your tax bill? You have numerous options. Here are just a few.

1. Buy, Buy, Buy
One of the obvious options is to purchase those things you’re going to purchase anyway over the next few months.

These write offs can be expenses for office supplies, subscriptions, that new all-in-one-printer-fax-copier you intended to get sooner or later, and even paying ahead on accounts that are not due until early next year.

The last-hour goodies you purchase won’t spoil if you don’t get to them right away, but they will get some tax deductions in under the wire if you spend the money by midnight Dec. 31, 2007.

2. Pay Later
If you intend to pay yourself a bonus, consider delaying payment until after Jan. 1, 2008, especially if the amount would push you into a higher tax bracket.

3. Gift Stocks
Transfer of stock ownership (maybe that dog that’s been sinking lower every month) in the form of donations to a qualified charity can save you on capital gains, as well as provide a tax deduction. Check with your tax advisor first.

4. Sell Stocks
You also can offset capital gains on your high-performing stocks by selling some of your losers. Ask your tax consultant before you make any selling decisions.

5. Contribute To Your Nest Egg
Put the maximum into your retirement accounts to get the most out of your tax-deferred savings. Contributions to many accounts are tax deductible. Talk to your tax professional.

6. Give, Give, Give
Clean that stuff out of your garage and donate those items to a local charity, but be sure to document the donation.

The Pension Protection Act of 2006 made recordkeeping rules more strict for charitable contributions.

You must have a bank record or a written communication from the charity showing the charity’s name, date of donation and amount. Bank records including canceled checks or bank statements suffice if they contain that information. No longer are personal bank registers, diaries or notes sufficient.

A few quirks and in the charitable giving realm include:

• Recipients must be qualified organizations. The IRS defines qualified. organizations as religious, charitable, educational, scientific or literary non-profit groups, including those working to prevent cruelty to children or animals.

• Used clothing and household items such as furniture, linens and appliances must be in good condition. You must be able to prove the condition, either with a photograph of the donated item or with a document from the receiving organization that states the donated item was in good condition.

• Vehicle donations are subject to special rules.

• Charitable contributions valued at $500 or more require you to file Form 8283, Noncash Charitable Contributions, with the form attached to your return.

7. Don’t, Don’t, Don’t
There are some things you cannot deduct.

They include:

• A contribution to an individual or a nonqualified organization

• A contribution from which you receive or expect to receive a benefit

• Donation of your time, services or personal expenses

• Appraisal fees

• Certain contributions of partial interests in property

• Gifts to fraternal societies for paying medical or burial expenses of deceased members

For the whole itemized picture of what you can and can’t deduct, check out IRS Form 526.

8. Get Last-Minute Tax Help
Your AFS Membership gives you access to a wealth of tax assistance. Check out these benefits at www.AFSwebsite.org.

• TaxCentral. Your one-stop online source for self-employed tax information. Get interactive tools, online calculators, step-by-step instructions for estimated taxes and more.

• TurboTax Online. AFS Members receive a 15-percent discount on this No. 1 online tax preparation program. File electronically and get your refund faster!

• ProTax®. As an AFS Member, you can get answers to all of your tax questions – at no additional cost. These certified public accountants give you complete and confidential answers to your questions in one business day.

Benefit availability dependent upon membership level and state of residence and is subject to change.

(Posted December 2007)

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