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Tax Tip of the Week
For the week of
September 15, 2003

Time is running out for effective 2003 tax planning

It's September and a great time to put your 2003 tax planning into high gear. With three months left, there's still time to make meaningful changes.

Run the numbers to estimate your 2003 tax liability. It may be lower than expected due to this year's far-reaching tax cuts.

Adjust your withholding if you find you'll be due a big refund. While the security of a refund is comforting, consider putting some of those dollars to immediate use. You may want to adjust your fourth quarter estimated tax payment if you're self-employed.

Factor in the child tax credit if you didn't receive an advance payment check for an eligible child. You'll be able to claim the credit when you file your return, provided you qualify.

Maximize your retirement contributions. You may have more disposable dollars as a result of the tax cuts or if you refinanced your home mortgage. Allowable contributions to 401(k) and SIMPLE plans increased this year. Don't overlook the catch-up contributions if you're age 50 or older.

Review your deductions. The standard deduction for married couples increased to $9,500 this year as part of marriage penalty relief. Some couples won't find it worthwhile to itemize, especially if they also reduced their mortgage interest by refinancing.

Review your investment strategy. This year's tax cuts included a drop in long-term capital gain rates. Try to meet the 12-month holding period to qualify for long-term treatment on any securities you plan to sell. Also factor the reduced tax rates on qualifying dividends into your planning.

Businesses should review capital spending plans to make full use of the new tax incentives. If your business qualifies, don't overlook the generous expensing provision passed this year.

For assistance in identifying the best tax-cutting moves in your situation, contact our office.

Prior Tax TipsClick here to view previous tax tips.

"Tax Tips" are published weekly to provide useful tax information. Return to this site every week for helpful tax-cutting suggestions, tax reminders, and current tax information.

The information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.

If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax-cutting information from time to time, please contact our office. We're here to help.

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