(a) Review your tax situation now, by projecting your current year income. Typically, one tries to defer income and accelerate deductions, but that is not always the best strategy.
(b) Remember to compute the alternative minimum tax. If you are subject to this tax, there are certain deductions which should not be accelerated.
(c) Maximize contributions to retirement plans. If you are self employed, and have not done so, consider setting up a keogh plan before the end of 1999.
(d) Be aware of all available deductions and tax credits.
(e) Analyze and plan your gains and losses concerning securities sales.

ROTH IRA - Conversion of existing IRA

The IRA may be taxable currently when converted to a Roth IRA, but it can appreciate in value and the earnings will never be taxed! Note, however, an existing IRA cannot be converted to a Roth IRA if your Adjusted Gross Income (excluding the IRA) exceeds $100,000 or if the individual is married and filing a separate return.

ROTH IRA - Current year contribution

Starting in 1998, individuals could make nondeductible contributions to a Roth IRA of up to $2,000 per year (or 100% of compensation, if less). A contribution to a Roth IRA is phased out when your adjusted gross income exceeds the following amounts:


single married - joint married - separate

$95,000 150,000 0

The Roth IRA will allow you to accumulate a substantial amount of money for retirement, with the earnings and capital gains never subject to income tax! In order for distributions to be never taxed, distributions must be taken at least 5 years after contributions were made, and:

- on or after attaining age 59 1/2
- at or after death
- at or after disability
- for a first time home purchase

CHARITABLE CONTRIBUTIONS - Appreciated assets

If you have held the assets long-term, you will receive a deduction equal to the current fair market value and avoid paying tax on the capital gain that you would incur if you sold the property. The amount of the deduction may be subject to certain limitations.