Some things you can do now to save yourself money in April


HERE ARE some last-minute things to do before the year ends:

Offset gains with losses. Calculate the net of the year's gains and losses, then use the losses over gains to offset up to $3,000 of ordinary income. But don't let taxes dictate your investment judgment.

Although you have until April 15 to finance a Keogh (self-employed) retirement plan, you must open the 1996 plan by Dec. 31. Earnings grow tax-deferred, which is a huge plus.

Pay your Jan. 15, 1997, Maryland tax installment this year and get a 1996 deduction.

Also, pay January mortgage and 1997 property tax bills this month.

Reduce your 1996 tax bill by making charity gifts. To avoid paying a capital gains tax on your profits, give appreciated stocks instead of cash. In most cases, you may deduct the stocks' current value.

Your 1996 IRA contribution also isn't due until April 15, but make it promptly so you don't forget.

In some cases, IRAs are tax-deductible.

Regarding IRAs, Primerica Financial Services' 65-page brochure, "Take Control of Your Financial Life," calls the IRA "the best tax shelter in America." Call (410) 668-9116 for a free copy.

Reduce your income and estate taxes by making tax-free gifts before the year's end. You are allowed to give $10,000 each to as many people as you like each year without a gift tax; married couples are allowed $20,000 in gifts.

Check your children's investment income. If they're under age ,, 14, their unearned income over $1,300 is taxed at your top rate.

If income nears $1,300, move the child's savings into low-dividend growth stocks or a tax-exempt money fund.

Avoid an IRS penalty by making sure you've paid enough income tax this year, including withholding. There's no penalty if you've paid 90 percent of this year's liability or 100 percent of last year's.

Also, review your stock and bond holdings with your broker. Are they right for 1997? As you grow older, switch low-dividend "growth" stocks into higher-income investments.

Pub Date: 12/27/96

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