VUE

DEPRECIATION "Depreciation is a beautiful word," says Shrinivas, "You can buy a piece of equipment and write it all off on day one." A $100,000 piece of equipment can be purchased with a loan and you can write the whole $100,000 off, even if the down payment was only $20,000. These purchases are often planned throughout the year, but are typically made at the end of the year. TAX-LOSS HARVESTING "Economics always trumps taxes," says Sankar. "If a stock is up and down, you may choose to hold on for economic reasons." However, he said, if you have a capital gain at the end of the year, it may be a perfect time to sell other investments that you've been looking to get rid of. If you have losses, you can sell these stocks and offset against a capital gain. Be careful to avoid a wash sale that occurs when a stock is bought, then sold at a loss, then bought back within a 30-day period. A wash sale can result in you being taxed for gains when, in fact, you sold at a loss. These are events that a tax advisor can help you address. A PROFESSIONAL PLAN There are many deductions, tax credits and benefits available and a CPA can help you navigate the 70,000-page tax law to find what will maximize your tax benefits. Things to consider at the beginning of the year when planning your tax structure include how much income you expect, stock market investments, 401k contributions, and real estate sales or purchases. Make a checklist of all items and meet with your tax advisor to discuss how these will affect your tax plan. Sankar explained that it's important to choose a tax advisor carefully. "There are people out there that are promoting tax shelters, but you need to find tax laws that make sense. Authorities look for supporting documents; keep pristine records," he says. Sankar recommends at least a quarterly visit with a tax advisor and always check in before filing in order to avoid any last minute tax law changes. People work hard for what they have," he says, "and you must work hard not to part with it." ECONOMICS ALWAYS TRUMPS TAXES. For more information, or to to consult with one of our top-of-the-line CPAs, call 201.587.9200 or visit us online at www.bergercpafirst.com. V U E N J .C O M 96

• Cover