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LAST-MINUTE 2005 TAX SAVING MOVES

December 30, 2005

Today's the last business day of the year for most taxpayers. We hope you've gotten your tax tax planning in hand by now so you can start celebrating the new year early. If not, there's still time to put a dent in your 2005 tax bill.

- Go online and make a charitable gift to a worthy cause with your credit card.

- If you won't pay alternative minimum tax for 2005, you can still prepay 2005 state and local taxes due next year. Iowans can prepay federal taxes due next year to deduct them on their 2005 Iowa returns.

- If you have a calendar-year S corporation with a loss, you can still make sure you have enough basis to deduct the loss.

- You can still close out long positions in loser stocks today and deduct the losses in 2005 (to the extent of 2005 capital gains + $3,000). For losses on short positions, though, it's too late for this year, as those aren't counted as tax losses until the settlement date.

- If you are a cash-basis taxpayer, you can write checks today for business expenses and deduct them this year.

- If you are an accrual-basis taxpayer, remember that expenses accrued to related cash-basis taxpayers have to be paid this year to be deductible this year.

- If you pay Iowa individual taxes, you can make a 2005 contribution to College Savings Iowa and deduct it on your 2005 Iowa return.

- You can help your estate planning by making personal gifts of up to $11,000 per donee, per donor. If you are a married couple, it doesn't matter which account the gift comes from, if you elect gift splitting on your 2005 Form 709. Remember, you will never have another chance to use your 2005 annual gift tax exclusion.

And remember, 2006 year-end planning can start January 1!

This is the final installment of our series on 2005 year-end tax planning.

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