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Aspen Office
400 East Main Street
Aspen, CO 81611

Carbondale Office
0326 Hwy 133, Suite 200
Carbondale, CO 81623

Year-End Planning For Individuals

Year-end tax planning is especially challenging for individuals this year because of uncertainty over whether Congress will enact sweeping tax reform that could have a major impact in 2012 and beyond, not to mention all the other thorny issues that are on the horizon. Regardless of what Congress does late this year or early the next, there are solid tax savings to be realized by taking advantage of tax breaks that are on the books for 2011.

Below is a brief list of ideas that may help you save tax dollars if you act before year-end.

• Review your investment portfolio and take any losses on stock positions if you don't already have capital loss carryovers.

• Consider postponing income until 2012 and accelerating deductions into 2011 to lower your 2011 tax bill. Note, however, that in some cases, it may pay to actually accelerate income into 2011. Talk to us for a customized plan for you situation.

• Consider using a credit card to prepay expenses that can generate deductions for this year.

• If you need to accelerate deductions, consider paying any state and local income taxes you expect to owe for 2011 by December 31st. However, we should review your situation to avoid limitations from alternative minimum tax before implementation.

• Consider retirement planning strategies, including; IRA contributions, Roth IRA contributions and traditional IRA to Roth IRA conversions.

• Consider making energy saving improvements to your residence in 2011 in order to qualify for the energy tax credit.

• If you are age 70-1/2 or older, consider making a charitable gift from your IRA. Such a transfer, if made before year-end, can achieve important tax savings.

• Make gifts sheltered by the annual gift tax exclusion before the end of the year and thereby save gift and estate taxes. You can generally give $13,000 in 2011 to each of an unlimited number of individuals without incurring any gift or generation skipping tax.

• If you become eligible to make health savings account (HSA) contributions in December of this year, you can make a full year's worth of deductible HSA contributions for 2011.

• Maximize the amount you set aside for next year in your employer's health flexible spending account if you set aside too little for this year.

These are just some of the year-end steps that you can take to save taxes. Again, by contacting us, we can tailor a particular plan that will work best for you.

Reese Henry & Company, Inc.
400 East Main Street Aspen, CO 81611
970.925 3771

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