Plotting Your Tax Strategies 



■ Byiom Calderone 



Are you already planning for 

 April 16th? Or wiU you 

 be frantically complet- 

 k ing your tax forms and 

 k rushing to the post 

 H office at the last min- 

 ute? Whether or not you want you want 

 to think ahead, tax time is only a few 

 months away. 



Here are some points from IDS 

 Tax and Business Services, a division 

 of IDS Financial Services, Inc., which 

 may help you in planning your tax strate- 

 gies. 



Only 20% of the interest you pay 

 on credit card charges, car loans or 

 other consumer debts is deductible in 

 1989,comparedwith40percentin 1988. 

 This will decrease to only 10% in 1990 

 and then will be eliminated. You may 

 want to consider consolidating debts so 

 you can pay off your high interest loans. 

 Consider shifting income to some- 

 one in a lower tax bracket. If saving for 

 a child's education is one of your finan- 

 cial goals, one way to get a head start on 

 an education fund is to shift income to 

 your child under the Uniform Gift or 

 Transfer to Minors Act. If your child is 

 14 or older the taxable income from the 

 investment is taxed at the child's rate, 

 not yours. 



Be careful, though. Under the cur- 

 rent law, if your child is under 14, any 

 investment income over $ 1 ,000 is taxed 

 to the child at the parent's marginal 

 rate, not the child's. 



Use deductible expenses to reduce 

 your taxable income. The travel costs 

 of going to and from the doctor's office 

 are deductible. If you changed jobs or 

 started a new job, when you itemize, 

 moving expenses may be fully deduct- 

 ible. Certain educational expenses that 

 are required for you as an employee to 

 improve your skills or knowledge may 

 be deductible. These expenses (along 

 with other miscellaneous expenses) are 

 deductible to the extent that they ex- 



ceed two percent of your adjusted gross 

 income. 



Deferring taxes can significantly 

 increase the amount of money in a re- 

 tirement fund and help to ensure you 

 experience a comfortable retirement. 

 When you retire, your tax rate will most 

 likely be lower than it was during your 

 working years. Although you eventu- 

 ally have to pay taxes on the income, 

 your total tax liability may be reduced. 

 There are several other ways to 

 defer taxes and possibly gain a tax 

 deduction. Contributions to your own 

 Individual Retirement Account may be 

 fully or partially deductible, depending 

 on your adjusted gross income and on 

 whether you or a spouse are covered by 

 a qualified plan at work. Any income 

 earned in an IRA grows tax deferred. 



An employee sponsored retirement 

 plan is another way to defer taxes. Con- 

 tributions to a 401 (K), tax-sheltered 

 annuity (TSA), Simplified Employee 

 Pension (SEP) plan, or other qualified 

 plans are generally not included in 

 income and increase tax deferred. 



Annuities accumulate tax deferred 

 and are good retirement funding com- 

 plements to non-deductible IRA's. 

 There is no limit to the amount you can 

 put away each year. 



Only one kind of income is gener- 

 ally exempt from federal taxes-income 

 earned on tax-exempt securities such as 

 municipal bonds, municipal bond mu- 

 tual funds, or municipal bond unit in- 

 vesunent trusts. Some of these also 

 offer state tax exemptions. You will 

 never have to pay taxes on the income 

 earned from these investments. 



Tax planning is a complicated and 

 complex process and shouldn't be lim- 

 ited to the tax season. Effective tax 

 planning is part of a complete financial 

 plan that will help you reach your finan- 

 cial goals and objectives. An account- 

 ant, tax specialist or financial planner 

 can help you choose the investments 

 10 



which are best for your specific finan- 

 cial and tax situation. ^ 



Tom Calderone is a Certified Financial 

 Planner (CFP) with IDS Financial Serv- 

 ices, Inc. He is registered with the Security 

 Exchange Commission (SEC) and the Na- 

 tional Association of Security Dealers 

 (NASD) and holds state licenses which 

 permit him to sell securities, annuities and 

 insurance. He is also a registered stock 

 broker. IDS is a licensed financial advisor. 

 His ojfices are located at 142 Portsmouth 

 Avenue in Stratham. 



Professional Tips 



The distance from which signs 

 can be read depends on the speed 

 of the vehicle and the size and 

 color of the lettering. A potential 

 customer traveling along the high- 

 way at 55 miles per hour has about 

 three seconds during which he can 

 read a roadside sign. That means 

 he has to be able to see the letters 

 for about 180 feet. Therefore, the 

 letters should be a minimum of 6" 

 high and 1" thick to be seen at that 

 distance. 



In studies conducted by the 

 International Flower Bulb Center 

 (IFC) of Hillegom, Holland, retail- 

 ers who displayed posters of bulbs 

 sold in the store (in full bloom) 

 reported a 30% increase in sales. 



For those of you creating 

 your own advertising and promo- 

 tional materials, Wheeler Arts is 

 an excellent source of copyright 

 free clip art. Their address is 66 

 Lake Park, Champaign, IL 61821- 

 7101. (217)359-6816. 



-Tina F. Sawtelle, Sawtelle 

 Marketing Associates, 

 Newmarket, NH 



