A key element to smart tax planning,says Rick Cohen, CPA,AXA Advisors (888-292-4492;www.axaonline.com), is to make certainyou get the greatest advantage fromyour tax deduction by coupling it withvery disciplined savings.
"The fact that you've written off anexpense and saved $10,000 looks goodon your 1040, but what have youaccomplished if you go ahead andspend that money? You haven'tachieved the ultimate in tax savings,"Cohen explains. "To maximize your taxrelief, you want to make that moneywork for you."
How can you achieve this goal?"Simple IRAs are becoming very popularbecause they're easy to set up and theycan be top-heavyâ€“loaded for the higher-paid professional without incurring alot of expenses for other employees,"Cohen says. "That has always been thenumber-1 issue holding back professionalsfrom establishing a qualifiedretirement plan. And yes, you can stillset 1 up this year."
Scott Haislet, CPA, a California-basedfinancial advisor, suggests sitting downearly with your tax professional andreviewing all the options available."Make the time period betweenThanksgiving and early December yourgoal for doing year-end tax planning.Then you'll have the time you need toaddress things."