SMALL MOV E S to Save Big Money on Your Ta xe s

Transcription

1 See page 2 SMALL MOV E S to Save Big Money on Your Ta xe s See page 4 Holiday Shopping S e c rets That Can S a ve You a Bundle Fuel Your Business Cash Flow With E - C o m m e rce See page 5 p n c. co m CA L L - P N C ALSO IN THIS ISSUE: > The Best Times for Holiday Shopping See page 3 > S h a re the Spirit of Giving by Vo l u nteering See page 6

2 Year-End Strategies to Cut Your 2008 Taxes For the most part, the window of opportunity for taking action to reduce your 2008 i n come tax bill closes on December 31. By making some small moves before the end of the year, you can save big money on April 15. Tis the Season for Tax-Saving M a n e u ve rs The end of the year isn t just about the holidays, it s also a valuable last chance to take action to re d u ce your lo o m i n g income tax bill. To reap the greatest benefits, however, you have to move quickly. After the first of the year, it will be too l a te to ta ke adva n tage of the va st majority of tax-savings maneuve rs. With that in mind, here are some year-end tax planning st ra tegies you should be considering now to minimize yo u r tax liability for the 2008 ca lendar ye a r. D e ferring Inco m e The most basic form of tax planning invo lves pushing yo u r tax liability into the future by deferring income into the nex t ye a r. Unle ss you have reason to believe that your inco m e will increase next year to the point that you ll move into a higher personal income tax bra c ket, virtually anything you can do to delay the re ceipt of income into 2009 is a good idea. Here are some ex a m p le s : If yo u re self-employed, wait until late December to iss u e i n vo i ces for re cent work so that yo u re m o re like ly to re ce i ve payment in January. If you re due a year-end bonus at work, ask your employer to delay paying it until early If you re planning on making an IRA withdrawal to cove r holiday expenses, postpone it until after January 1. A cce le rating Deductions If you have money to spend or inve st on something that s d e d u c t i b le, it makes sense to do it to the full ex tent poss i b le b e fo re ye a r s end. Assuming you plan to itemize yo u r deductions on your tax return, you should consider these st ra te g i e s : If you make your January mortgage payment befo re the end of December, you can deduct another month s worth of inte re st on your 2008 re t u r n. If you have large and pre d i c ta b le medical expenses, such as bra ces for your children, you can benefit by p re-paying some of your 2009 bills this ye a r. Other opportunities to pre-pay include property ta xe s, q u a r te r ly sta te income tax est i m a tes and educa t i o n a l tuition and fees, all of which can be claimed as ite m i z e d d e d u c t i o n s. You also may be able to benefit by making increased contributions to your 401(k) plan or your child s 529 co l lege savings plan befo re ye a r s end. 2 D i re c t i o n s N OVEMBER / DECEMBER 2008

3 L eve raging Your Loss e s If your portfolio is we i g h ted down by a losing stock or two that yo u d l i ke to unload, now s the time to do it. The good news is that any lo ss e s you realize can be used to offset ca p i tal gains genera ted elsew h e re in your portfolio this year, as well as up to another $3,000 in ord i n a r y i n co m e. T h e re s one ca veat here be ca re f u l to avoid a wash sale. Once you sell a stock and ta ke the deduction, yo u cannot buy the same stock back within 30 days without negating your deduction. Sharing the Spirit of Giving It s been said that charity is it s own reward, but it also can do wonders for your tax bill. With the spirit of giving permeating the holiday season, it s a great time to m a ke contributions to your fa vo r i te charities which qualify as ite m i z e d deductions on your tax re t u r n. Be ca reful to document yo u r donations in order to substa n t i a te your deductions. If yo u re making a m o n e tary contribution, you must h a ve a ca n ce led check, credit ca rd re co rd or a written re ceipt that i n d i ca tes the charity's name and your donation amount. For noncash contributions, make sure to keep a list of every item you give away, along with an est i m a te of its fair market va l u e. Keep an Eye on the AMT O r i g i n a l ly designed to help ensure that the wealthy pay their fair share of ta xes, the Alte r n a t i ve Minimum Ta x (AMT) is now creeping into the middle c l a ss with more and more ta x p a ye rs being hit with the AMT each ye a r. If t h e re s a chance you may be subject to the AMT for 2008, consult with yo u r tax adviser befo re utilizing any of the tried-and-true tax planning st ra te g i e s outlined above. The Best Times to Shop for Barg a i n s If yo u re looking for bargains, it pays to know how re ta i le rs opera te. > For clothes, Thursdays are the best days to shop. Retailers get their new inve n tory eve r y four to six weeks, and they l l g e n e ra l ly mark-down older m e rchandise to move on Thursday, so they can restock the racks for we e kend shoppers. > For department sto res, Saturd a y evenings are best. That s when they try to clear the shelves to make room for the merchandise they re advertising in their Sunday newspaper circulars. Important Investor Information: S e c u r i t i e s and bro ke rage service s a re provided by PNC Investments LLC, member FINRA and SIPC. Annuities and other insurance products are offered by PNC Insurance Services, LLC a licensed insurance agency. If you re looking to avoid crowds, Mondays and Tuesdays generally a re your best times to hit the mall. Additionally, shop early in the morning or late in the evening, when there are fewe r s h o p p e rs in the sto res and s a le s p e o p le will have more time to help yo u. p n c. co m CA L L - P N C 3

4 With the economy tightening, it s more important than ever to keep your holiday spending in check this ye a r. J u st because it s the season of giving, that doesn t mean you have to break the bank on your holiday shopping. Get Serious About Saving Money This Ye a r R e ta i le rs acro ss the country are positioning themselves to grab their share of the est i m a ted $500 billion that A m e r i can co n s u m e rs are ex p e c ted to spend this holiday season. It s the time of year when sto res make most of their profits, but it s still poss i b le for savvy shoppers to s a ve on their purc h a s e s. If yo u re serious about saving on your holiday shopping, it helps to know how re ta i le rs plan for the holiday so yo u can make your plans acco rd i n g ly. With that in mind, here a re some tips to help you make the most of your money. > The Early Bird Gets the Discount Shop after 6 p.m. on the day befo re a big sale. Most re ta i le rs set up their sto res and their cash re g i ste rs for sale prices the night b e fo re and make them ava i l a b le to shoppers then. > Ta ke Adva n tage of Coupons Most people think coupons are just for supermarkets, but they can save you a bundle on your holiday shopping too. Look fo r coupons in newspaper ads and circ u l a rs and check out the web sites of the sto res you plan to visit befo re h a n d. > M a ke Friends With Sale s p e o p le It pays to get to k n ow the sales staffs at the sto res you visit; they ca n p rovide a wealth of va l u a b le information. Ask them about unadvertised coupons, special discounts, loya l t y p ro g rams and their sto re s plans for upcoming sale s. > Ask for a Better Price Don t be shy about trying to negotiate a better price, especially if yo u re buying m u l t i p le items at one sto re. Additionally, if you see an i tem you want to buy with a slight imperfection, ask for a 20 or 25 percent discount. The wo rst that can happen is they say no. Continued on page 6 D i re c t i o n s N OVEMBER / DECEMBER

5 Cashing in on E-Commerce The Internet offe rs a great opportunity to deve lop new sources of revenue for small businesses. If yo u re not a l ready making sales online, it s simpler than you may think to fuel your business cash flow via e-co m m e rce. C re a te a Clear Path for Succe ss For small businesses eve r y w h e re, e - co m m e rce is leveling the playing field and enabling them to reach a b roader pool of custo m e rs than eve r b e fo re. With to d a y s abundance of we b s i te options, however, it s not enough s i m p ly to have an online pre s e n ce. L i ke any business ve n t u re, your e - co m m e rce pro g ram must be based on one very important component a st ra tegy for succe ss. M a ke All Roads Lead to Your Home Pa g e One of the keys to a succe ssful e-commerce program is marketing your web site throughout the online community. By understanding your a u d i e n ce s habits and pre fe re n ces, yo u can st ra te g i ca l ly place links to your s i te on other web sites that pote n t i a l c u sto m e rs are more like ly to visit. One way to build traffic for your site is t h rough banner ads or adve r t i s e m e n t s on search engines. Another option, which can co st little or nothing, is by s u p p lying co n tent to other web site s. For insta n ce, you may want to re g i ste r with your lo cal chamber of co m m e rce or partner with other companies that m a r ket re l a ted products or services to t rade advertising space or links. Let Custo m e rs Visualize Your Offe r i n g s Once you ve attracted potential customers to your site, it s critical to provide them with a clear picture of what you re selling. B e cause they can t touch your p roducts online, custo m e rs will a p p re c i a te as many details as poss i b le about each of your individual offe r i n g s. Describe your products in detail and offer comments or testimonials from satisfied custo m e rs, if poss i b le. Prov i d e plenty of photos and visual aids, as well. Custo m e rs are much more like ly to buy your wares if they can see what t h ey re getting. M a ke It Easy to Put Your Money Where Your Mouse Is If your custo m e rs can t easily reach the c h e c kout, they re le ss like ly to make a p u rchase. Always make sure your site is simple to navigate without bro ke n links or faulty arc h i te c t u re and sta y away from overly flashy graphics. Plain text links are best for helping customers find their way around your site. When your custo m e rs are ready to buy, it s essential to make it as easy as poss i b le for them to do so. That means accepting payment via cre d i t ca rd. Your Merchant Services prov i d e r can help you set up a simple syste m for pro ce ssing your online credit ca rd payments and if your business doesn t already accept credit card payments, talk to your business banker about getting started. Keep Your Web Site Fresh and Active Having an outdated web site re f le c t s poorly on your company s products and services. On the other hand, if your web site has a modern look and updated content, it shows that your company is ahead of the game. M o re importa n t ly, co n sta n t ly updating your web site keeps customers engaged and coming back for more. Finally, no matter how great your web site is, you should never le a ve it to fend for itself. By cro ss - m a r ke t i n g your web address on brochures, ca ta logs, signatures, in-sto re signage and business ca rds, yo u l l co n t i n u a l ly drive new business to yo u r s i te and ta ke gre a ter adva n tage of the opportunities e-co m m e rce can prov i d e to enhance your business cash flow. 5 D i re c t i o n s N OVEMBER / DECEMBER 2008 p n c. co m CA L L - P N C

6 Continued from page 4 > Get the Sales Price Even After Yo u ve Bought the Item If you buy an item at full price one week and see it on s a le at the same sto re the next week, go back and ask for the discount. If you return with your sales re ce i p t within 14 days, most re ta i le rs will refund you the p r i ce diffe re n ce. Vo l u n teer to Make the Season Brighte r The holiday season is one of the most popular times for people acro ss the country to share the spirit of giving by donating some of their time for a good ca u s e. A cco rding to the Corporation for National & Community Service, the fo l lowing ca tegories re p resent the most popular ways for Americans to vo l u n teer their time: > Seek Out Stores That Match Prices Many retail stores will meet a competitor s price on the same item, and some will even offer it at a 10 percent d i s count. Try to do the bulk of your shopping at sto res that match p r i ces, then keep your eyes peeled for better prices e l s ew h e re. Activities Pe r formed by U.S. Vo l u n te e rs * > M a ke Money While You Shop Take advantage of programs that allow you to earn rebates or rewards points on your purchases. Even if you can affo rd to pay cash, it may make more sense to use a debit or credit ca rd for holiday shopping so that you can g e n e ra te a payback on your purc h a s e s % Coach, re fe ree, tutor, teach or mento r % Fu n d raise or sell items to raise money for charity % Collect, pre p a re, dist r i b u te or serve fo o d % Engage in general labor; supply t ra n s p o r tation for people % P rovide pro fe ssional or management a ss i sta n ce, including serving on a board or co m m i t te e % C o l lect, make or dist r i b u te clothing, c rafts or goods other than fo o d Beating Them at Their Own Game R e ta i le rs approach the holiday season very seriously, and they use a variety of tactics to lure shoppers into their sto res and enco u rage them to spend fre e ly. By a p p roaching your holiday shopping with the same type of planning and discipline that re ta i le rs use, you ca n e n s u re yo u re getting the most for your money. *Based on perce n tage of American adults who re p o r ted taking part in these activities at le a st once during FOR MORE INFO R M AT I O N : PNC Directions is a publication of the PNC Financial Services Group, Inc., a highly diversified and growing financial services organization offering a wide range of products and services for individuals, businesses, corporations and government entities. No matter how simple or complicated your needs, PNC is sure to have the right products, knowledge and resources to provide you with a variety of solutions. For more information, please call CALL-PNC, visit pnc.com or stop by any PNC location The PNC Financial Services Group, Inc. All rights re s e r ve d