Don't Be an April Fool!
There's time for some last-minute tax moves.
If you've already set up a Keogh retirement plan, be sure to
make a contribution before April 15 for the 2001 tax year. For
2001, the self-employed can contribute up to 25 percent of their
compensation and deduct it from current taxable income.
But if you don't have a Keogh plan, consider a SEP-IRA.
"SEPs are one of the most common types of retirement plans
used by self-employed people because of the ease of administration
and high contribution limits," says Paul Gada, a tax analyst
with CCH Business Owner's Toolkit, a division of Riverwoods,
Illinois, tax and business law information provider CCH Inc. For
2001, the contribution limits for a self-employed person are about
13 percent of his or her net earnings.
You can also reduce income for 2001 up to $3,000 by claiming net
capital losses on investments that took a hit in 2001. Losses over
$3,000 can be carried forward to 2002, says Gada.
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Can't pay all the taxes you owe? The IRS recommends filing
on time and paying as much as you can. Also consider an installment
plan. Go to the IRS Web site (www.irs.gov) to find out whether
you're eligible for an installment agreement.
Finally, check with your accountant to make sure you've
taken all the deductions and credits for which you qualify.
Great Falls, Virginia, writer Joan Szabo has reported on tax
issues for more than 15 years.
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