As the end of the year approaches, it is a good time to think of planning moves that
will help lower your tax bill this year, and possibly the next. Factors that compound the challenge include the stock market’s swoon, the difficult economic climate we’re in right now, and the strong possibility that there will be tax changes in the works next year.
In fact, there might even be another economic stimulus package carrying tax changes
enacted before the end of this year.
The indisputably good news we are certain of is this:
Congress has acted to “patch” the AMT problem for 2008, retroactively reinstating a number of tax breaks (such as the option to deduct state and local general sales tax instead of state and local income tax, and the above-the-line deduction for higher education expenses) and has created new tax breaks that go into effect for the 2008 tax year (including a tax credit for first-time homebuyers, a non-itemizer deduction for state and local property tax, and a non-itemizer deduction for certain disaster losses). For 2008, businesses enjoy tax breaks such as a beefed-up expensing option under Code Sec. 179; a 50% bonus first-year depreciation writeoff for most new machinery, equipment and software placed into service this year; and a reinstated research credit.