Re: Spreading out taxes

LOL!  Simplicity!

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"Paul Thomas, CPA" <paulthomascpapc@xxxxxxxxxxxxx> wrote in message news:JKMgf.5792$KP1.3387@xxxxxxxxxxxxxxxxxxxxxxxxx

<kylebeck@xxxxxxxxx> wrote 
Ok, I have been trying to get a handle on some tax issues that I'm
having.

This year I switched halfway throughout the year from being a regular
employee to self-employed.  So far it has been great, but I'm worried
that I'm going to end up screwing myself next year if I don't take
steps now to balance out my tax burdens.

Because I didn't actually receive and $$ until after September 15, I
don't have to make an estimated state tax payment until 2006.
Something tells me this is unwise, as I won't be able to claim it until
the 2007 tax season.  Or maybe this is a good idea, as I will be making
roughly 50K more next year.


Even though you will make your fourth quarter estimated tax deposit in January 2006, it is a credit against your 2005 taxes. If you itemize your deductions (mortgage interest, property taxes, charitable contributions, etc) you may want to pay any state estimate in December though.


Also,  I am worried about hitting the AMT next year.  Because I will be
floating around the next income bracket next year, I am tempted to pay
this year's property tax bill next year, to help bring down my taxable
income for 2006.  However, it seems that this could be wasted if I hit
the AMT next year?  Am I missing something?

Any ideas as to how to ensure I spread everything out correctly?
General strategies?


If AMT is an issue in 2006, shift as many AMT items to 2005 - or push them off to 2007.

Like make your state estimated fourth quarter (05) in December 05, and make your fourth quarter (06) in January 07.



--
Paul Thomas, CPA
paulthomascpapc@xxxxxxxxxxxxx







.

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