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YEAR-END PROJECTIONS: THE START OF YEAR-END PLANNING

December 06, 2005

If we could first know where we are, and whither we are tending, we could then better judge what to do, and how to do it. -Abraham Lincoln, from his "House Divided" speech of 1856.

What was said then, is true today in tax planning. If you don't know what your taxes will be if you do nothing before year-end, you don't know what steps to take to save money, or even if you need to take any steps at all.

A year-end tax projection is simply a mock up of what your tax return will look like, based on what has happened so far and what you know will happen the rest of the year (bonuses, additional paychecks, and so on). If you don't do this much, trying to do tax planning is like having to start on a trip in the dark without a map or any idea where you are.

This post is the first of a series of year-end planning tips for 2005.

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