Develop action plan for tax changes and potential changes.

Sell stock market investments to lock in tax losses. Buy back different stocks / mutual funds or wait 30 days to buy back same investments. Consult your Investment Advisor.

Consider tax-free municipal bonds. Top federal rate and state rate make these investments more attractive.

Consider Guaranteed Annuity for safety and deferred taxable income. Consult your Investment Advisor.

Maximize your retirement plan contributions: 401k, IRA, SEP, Simple IRA etc. Invest funds based on your risk tolerance and current market conditions. Consult your Investment Advisor.

Consider rental real estate investment. Tax and appreciation potential. Economic recession usually means buyer’s market.

Consider “Go Zone” property for rental real estate or commercial real estate. Depreciation deduction is 50% of construction costs for buildings built after August 29, 2005. Expires 12-31-08 and 12-31-2010.

Cost segregation study on commercial or rental real estate. An engineering study can be used to reallocate component parts of a building and accelerate depreciation deductions.

Employees ask your employer to reimburse business expenses instead of taxable bonus or raise. Expenses such as car expenses, cell phone, internet, home computers, dues and subscriptions can be reimbursed by employer tax free. Employer also saves FICA taxes.

Maximize contributions to charity this year and minimize next year. Donate old clothes etc. to charity. You must have a receipt from the charity other than your cancelled check.

Convert a hobby or start a sideline business.

Examples:

• Ebay sales
• Travel agent
• Artist
• Writer
• Photographer
• Consultant
• Farm / Horses
• Antiques

You must demonstrate a “profit motive.” Open a separate bank account / form a limited liability company, obtain marketing materials such as business cards, letterhead etc.

Consult for more specific ideas for your unique situation.