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The ink is still drying on your 2004 tax return… or perhaps you haven’t even filed yet… so why even put one moment of thought into next year’s taxes?

Simply put: Savings. By putting a sound plan into place here and now, you can be sure that you are positioning yourself to reduce your tax burden next year. You may even prevent a few tax season headaches along the way.

Your docket may be plenty full, but the following strategies are simple to implement and will put you in great shape for next year.

1. Expense New Assets. The IRS section 179 deduction allows you to immediately expense the entire cost of the assets you purchase this year – your deduction could be as much as $102,000 in 2005. Check with your accountant for a detailed explanation of how this deduction works. Understanding this law will help you plan your asset acquisition in 2005.

2. Get in the Zone. If your firm is located in New York’s "Liberty Zone," find out if you can tap into the $5.5 billion in tax incentives Congress authorized as part of the "Jobs and Growth Tax Relief Reconciliation Act of 2003." Click here to learn about the Liberty Zone provisions: www.nylovesbiz.com/tax_and_financial_incentives/liberty_zone

3. Assess this Year’s Tax Experience. While this year's return is still fresh on your mind, take a hard look at how it went, and consider how it might have gone differently. Did you file on time? Did you have all of your documentation ready to go? Are you worried about an audit? Do you wonder if you missed out on some deductions? Make a plan to address any area you are not satisfied with. (Note: Make sure that all business meetings are classified as such and not "entertainment" for maximum tax benefit.)

4. Raise the Bar on Salary Increases. If you get a raise in pay or any other income increase this year, consider diverting most of it to your retirement accounts, which will avert a tax increase and will also help you bulk up your retirement fund. Make sure you increase your contribution to your 401(k) plan to the maximum – for the 2005 tax year, the deferral limit increases to $14,000.

5. Make your Vacation Home More "Interesting." Because a second home is defined by the IRS as any place with sleeping, cooking and bathroom facilities, that would include not only an actual second home, but may include boats and motor homes as well. And the interest on these vacation properties is 100% deductible. If you rent your vacation home for 14 days or less, you can deduct interest and taxes, but the rental income is tax-free.

6. Beef up Reimbursed Expenses. Have the firm consider reimbursing larger amounts of unreimbursed business expenses such as dues, publications, license fees, outside entertainment, internet fees, and mobile phone.

7. Give with Gusto. Charitable deductions (consider giving appreciated stock vs. cash; talk to your accountant about tax savings) are an obvious place to look for deductions, and the beauty is that they benefit both the giver and the receiver. But make sure you are following Uncle Sam’s rules. For more information on "Tax-Smart Giving," visit www.turbotax.com/articles/TaxSmartGiving.html

8. Get Organized, Even if it's Boring. Set up some files and throughout the year, plunk your tax-related receipts and documents in there the minute you obtain each one. This will eliminate the need for a scavenger hunt next year.

9. Smarten Up your Investments. Look at your portfolio and make sure you are taking advantage of investments that can reduce your tax burden. For TurboTax’s "10 Top Strategies for Tax-Smart Investing," check out www.turbotax.com/articles/10TopStrategiesforTaxSmartInvesting.html

10. Take the Pain out of Medical Spending. If your firm offers a Flexible Savings Account or a Health Savings Account, you can turn your premiums, co-pays and other IRS-approved out-of-pocket costs into tax-free expenses. More information about Health Savings Accounts, which became available in January 2004 can be found at www.treas.gov/offices/public-affairs/hsa. Try out this online calculator that will help you determine how much you should put into your FSA: www.kiplinger.com/tools/flex

Amper will periodically send e-mails to our clients and friends to keep you informed of some of the most current business issues. If you prefer not to receive further informational e-mails from us, please notify us at www.amper.com.