A Dozen Last-Minute Tax Tips

This is your last chance to take advantage of the old tax law, protect yourself using these helpful tax tips including 12 pieces of tax advice.

| November/December 1986

This is your last chance to take advantage of the old tax law using these helpful tax tips. 

I know, it's five months until tax time, and you don't want to think about it right now. You're going to save a bundle with the new tax law anyway, right?

Maybe, maybe not. If you've itemized your deductions over the last few years, you may have a very unpleasant surprise waiting for you on April 15, 1988. There are ways to head off some of the pain, though. By taking advantage of being on the cusp of the tax law shift, you can save money using these tax tips.

A Dozen Last-Minute Tax Tips

Consider carefully the financial balance between the savings offered by the following methods and the lower marginal tax rates that will be in effect next year. (For example, if you're a farmer, you may want to purchase feed and seed this year for use next year, since your tax rate will be lower next year.)

My calculator has been running full speed since the tax law was finalized in late August (the proposed legislation hasn't actually been passed by Congress as MOTHER EARTH NEWS goes to press). Here are a few of the approaches I'm recommending to my customers.

1. Incorporate or become self-employed, if you can . Many of the deductions previously available to employees and individuals have been stripped from the new tax law. Only those employee business expenses in excess of 2% of adjusted gross income will be deductible, and those can only be used as itemized deductions. A number of items — including union dues and tax preparation fees—that you may have deducted on the line Miscellaneous Deductions from Schedule A (Itemized Deductions) will no longer be allowed. Sales tax will no longer be deductible for individuals. In fact, as of January 1, 1987, many cherished deductions of the citizen with one employer will disappear.

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