Dear Clients and Friends,

As the end of 2011 approaches, now is a good time to start year-end tax planning to minimize your individual and business tax burden.  Generally, year-end tax planning involves considering at least two years – in this instance, 2011 and 2012.  With tax changes on the horizon, you should consider the likelihood of future changes.  Tax planning is a dynamic process and is best accomplished with forethought and assistance from your tax adviser.

Before going into more specific, detailed planning tips, here are two basic principles that can help guide your overall thinking:

• If you expect your tax rate will be higher in 2012, you may benefit from accelerating income into 2011 and deferring deductions into 2012.
• If you think your tax rate might be lower next year or will be unchanged, consider deferring income to 2012 and accelerating deductions into 2011.

Remember, the focus is on your marginal tax rate.  That is the highest rate at which your last, or marginal, dollar of income will be taxed.  Even though overall tax rates may rise in the future, if your income will be substantially lower in 2012 than in 2011, your marginal tax rate may decrease because of our graduated tax bracket system.

We have put together some helpful tax planning opportunities that involve actions you can take during the remainder of 2011.  This does not include every tax planning opportunity that may be available to you, and it is advised that tax projections confirm planning strategies.

Download Tax Planning Opportunities for 2011