Now is a good time for '08 tax planning

With Christmas just a few days away and New Year's hot on its heels, I'm sure your thoughts are focused on family, friends, peace, joy ... and tax planning.

What's that you say? Tax planning has not crossed your mind? Well, maybe it should.

And fortunately for you, I have year-end tax planning tips to share, courtesy of Grant Thornton LLP.

Dave Allen, partner and tax-practice leader in Grant Thornton's Salt Lake office, says people shouldn't wait until April to worry about taxes. You can take steps before Dec. 31 that will help you when it is time to file.

In tax-planning meetings, Allen says, the first question people ask lately is what they can do now to save on taxes later.

"A lot of taxpayers have a lot of losses, and they're wondering about the tax implications of selling assets at a loss," Allen says. "They're definitely focused on getting rid of some of their portfolio and some of their loss positions."

That question and others are addressed by the last-minute tax-planning tips from Grant Thornton's national office. Among those tips are:

• Accelerate deductions and defer income. "Generally you want to accelerate deductions into this year and defer income into next year," the company's release said.

• Consider charitable contributions carefully. "Think about giving appreciated property to charity so you can deduct the full value without paying capital-gains taxes," the release said. "But don't donate depreciated property. Sell it first and give the proceeds to charity, so you can take the capital loss and a charitable deduction."

• Prepare to use the low capital gains and dividends rates wisely. "Remember that the 15 percent tax rate on long-term capital gains and qualified dividends is scheduled to increase after 2010," the release said. "President-elect Barack Obama has even proposed increasing this rate sooner for high-income taxpayers."

• Leverage retirement-account tax savings. Allen says you should maximize your 401(k) contributions, especially if your company offers a match. "I look at this as a great opportunity to buy," he says. "You need to be careful what you invest in, but assuming the economy doesn't totally crater, it's a great opportunity to get in."