By Harvey Amwake, C.P.A.

    Once you’ve filed your 2008 tax return, you may be tempted to file away your records and relax a little. However, you could be missing a perfect opportunity to save on your 2009 taxes. With your completed 2008 return in one hand, and a recent paycheck stub in the other, you’re ready to get an early start on tax planning for 2009.

    First, review your current paycheck deductions. Are your federal, state, and local tax withholdings on target? Significant life changes in 2009 could result in tax underpayment penalties unless you adjust your withholdings.

Are you taking full advantage of your employer’s retirement plan match? If not, you’re leaving money on the table. Contribution limits on 401(k) and SIMPLE plans have gone up as well, so consider telling your employer to increase your retirement withholding. And while on the subject, ask your employer if the company offers the Roth 401(k). It might fit nicely in your overall retirement plan.

 

Maximum use of your flexible spending account is also a tax-smart move. A review of your 2008 medical deductions may shed light on how much you’ll use in 2009. Remember that IRS rules let you buy over-the-counter medications out of your flexible spending account, so factor that into your calculations.

    You might actually save taxes in 2009 by spending money. How? By investing in qualified, energy-efficient equipment, such as hybrid vehicles and home improvements. Such purchases may be eligible for tax credits in 2009. So what’s good for the environment could also be good for your wallet.

    If you meet the requirements, you might also qualify for tax breaks for buying a first home or a new car in 2009.

    The 2009 tax year may be far from your thoughts, but not from ours. If you’re ready to talk taxes, we’re ready to listen. Talk to you tax adviser or give us a call for an early start on your 2009 tax planning.

This article is for general information only and does not constitute financial advice.  If you have any questions about financial matters, consult a professional tax adviser.  Harvey Amwake, CPA, is a tax and small business consultant with the accounting firm of Arthur Spoon & Company, Ltd., at 1130 E. Missouri Ave., Suite 820. He can be reached at 602-264-6500, ext. 1, or by e-mail at Harvey@ArthurSpoon.com.