Checklist of things to do before the end of 2011

There are many tax-saving steps that can be taken before the end of this year. Here is a list of

the most important actions that should be taken no later than Dec. 31 , 2011 to save on your

taxes:

Individual Tax Planning

1. Realize losses on stock, while substantially preserving investment position

2. Convert investment income, taxable at regular rates (e .g., interest income), into

qualifying dividend income

3. Arrange with your employer to defer bonus until 2012

4. Increase the basis in S corporation or partnership, to make possible a 2011 loss

deduction

5. Use a credit card to prepay expenses

6. Make energy saving improvements to your home that qualify for tax credits in 2011

7. Pay contested taxes in order to deduct them this year, while continuing to contest

them the following year

8. Put equipment in-service before year-end to qualify for the 100% bonus first-year

depreciation allowance

9. Make expenditures qualifying for the $500,000 business property expensing election

10. Settle an insurance or damage claim if this will maximize casualty loss deduction

11. Apply bunching strategy to "miscellaneous" itemized deductions, medical expenses,

and other itemized deductions to increase deductible amounts.

12. Increase withholding to eliminate or reduce an estimated tax penalty

13. Set up a self-employment retirement plan

14. Make gifts that take advantage of the $13,000 gift tax exclusion

15. Watch out for marriage penalty in regard to year-end marriage or divorce plans

16. Consider deferring a debt cancellation event until 2012

17. Decide whether to elect to deduct investment interest against capital gains and/or

qualified dividends.

© 2011 Godfrey Wise Berg e PAs & Advisors. LLC. All rights reser"Ved

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Building Financial Foundations for Generations

18. Avoid personal holding company tax by making dividend payments

19. Take steps to avoid or minimize income tax on Social Security benefits

20. Structure a real estate deal to avoid paying interest on tax deferred under installment

method

21. Step up level of participation in business activity to meet the material participation

standard, under passive loss rules

25. Dispose of passive activity to free up suspended losses

26. Ask your employer to increase withholding of state and local taxes in order to pull the

deduction of those taxes into 2011

27. Extend subscriptions to professional journals, pay union or professional dues, enroll

in (and pay tuition for) job-related courses, etc., to bunch into 2011 miscellaneous

itemized deductions that are subject to the 2%-of-AGI floor

28. Taxpayers who itemize may accelerate a big ticket purchase, such as a boat or car,

into 2011 to qualify for state and local sales tax deductions, instead of state and local

income taxes

29. Consider making expenditures that qualify for 100% bonus first-year depreciation, if

bought and placed in-service in 2011

30 . Nail down a work opportunity tax credit (WOTC) by hiring qualifying workers , such as

certain veterans , before the end of 2011

31 . Make qualified research expenses before the end of 2011, to cla im a research credit

32 . If you own an interest in a partnership or S corporation, you may need to increase

your basis in the entity, so that you can deduct a loss from it for 2011

These are just some of the year-end steps that can be taken to save taxes . Again, by contacting

us, we can tailor a particular plan that will work best for you . For more information on one of the

points outlined above, please contact Craig Godfrey at Craig.Godfrey@myGWBcpas.com, Eric

Williams at Eric .Wiliiams@myGWBcpas.com or by calling 517-908-0888.

The Internal Revenue Service recently issued regulations that require written advice regarding tax

matters to meet very detailed and comprehensive requirements before it can be relied upon by a

taxpayer to avoid penalties that might apply if the tax benefits or results discussed in this

© 2011 Godfrey Wise Berg CPAs & Advisors, LLC. Al l rights reserved .

document (and any attachment) are disallowed. Compliance with these rigorous standards and

requirements exceeds the scope of this newsletter. Consequently, the analysis and advice

contained in this document, and any attachments, regarding federal tax matters is not intended to

be used, and may not be relied upon by you or anyone else, for the purpose of avoiding any

federal tax penalty.

This newsletter provides general information and may not apply to your particular situation. In

addition, this article does not offer legal or tax advice.

© 20 11 Godfrey Wise Berg CPAs & Advisors, LLC All rtgh ls reserved.