5 Steps to Prepare for Tax Time

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A Personal Note The equity markets are off to a great start in 2011.  We had a very encouraging 4th quarter earnings season as most corporations are still showing signs of growth.  The DOW is already up 5.7% this year, finally outperforming the mid and smaller cap indexes. Last year, we consistently talked about the larger stocks being more attractive on a valuation basis.  This is finally coming to fruition and believe the trend will continue in 2011.  Bond rates are finally beginning to rise and expect to see investors start to rotate out of bond positions and into stocks.   Happy Valentine’s Day! Warm regards, Catherine Maniscalco Avery CAIM specializes in creating and managing customized and fully diversified investment portfolios for private investors. 203.966.2712  p 203.966.5697  f www.caimllc.com Warm regards, Checklist: 5 Steps to Prepare for Tax Time           April 15th will arrive before you know it.  Which leads to the question; what is the most simple and efficient way to tackle the tax process this year?  Accountants are helpful but you yourself can take charge of the process by ensuring you have all your bases covered in terms of tax paperwork.  Here are the 5 most important steps to get off to a running start:   1. Create a master checklist. The list should come from reviewing your 2009 returns and looking for items like W2 forms, bank statements, HSA account information, energy saving home improvements, tuition, property taxes, child care deductions and charitable deductions.     2. Put all of your tax receipts in one place – a shoebox or large envelope marked “2010 Taxes” works fine.  Keep it next to your daily mail pile and place the items you need for your taxes inside as soon as they are received.  There is nothing worse than having to hunt for those papers at the last minute.   3. Maximize your retirement accounts. If you are in a traditional IRA, Roth or Custodial IRA that allows a maximum contribution of $5,000, it can be funded by April 15th. A SEP account allows the lesser of $49,000 or 25% of compensation (20% if self-employed.)   If you’re 50 or older there are also catch up contributions you can take advantage of:  $1,000 for traditional IRA, $2,500 for the simple IRA and $5,500 for a 401 (K).     4. Maximize deductions.  Search for all allowable deductions, including those you may have overlooked in the past, i.e. state and local sales tax deductions, student loan interest, medical deductions, tuition and school expenses, energy-saving home improvements, home-office expenses (for the self-employed) and even tax preparation fees.    5. Call your accountant.  You are now ready to call your accountant from a position of power! Best to call sooner than later to ensure that you are first in line.   The earlier you get your taxes into the IRS, the earlier the good (or bad) news will get to you!   Copyright 2011, CAIM LLC   Disclaimer: NO CONTENT PUBLISHED AS PART OF THE CAIM LLC NEWSLETTER CONSTITUTES A RECOMMENDATION THAT ANY PARTICULAR INVESTMENT, SECURITY, PORTFOLIO OF SECURITIES, TRANSACTION OR INVESTMENT STRATEGY IS SUITABLE FOR ANY SPECIFIC PERSON.  TO THE EXTENT ANY OF THE CONTENT PUBLISHED AS PART OF THE BLOG MAY BE DEEMED TO BE INVESTMENT ADVICE, SUCH INFORMATION IS IMPERSONAL AND MAY NOT NECESSARILY MEET THE OBJECTIVES OR NEEDS OF ANY SPECIFIC INDIVIDUAL OR ACCOUNT, OR BE SUITABLE ADVICE FOR ANY PARTICULAR READER.  EACH READER AGREES AND ACKNOWLEDGES THAT ANY SPECIFIC ADVICE OR INVESTMENT DISCUSSED IN THE BLOG MUST BE INDEPENDENTLY EVALUATED BY THE READER AND HIS OR HER ADVISER IN VIEW OF THE READER’S INVESTMENT NEEDS AND OBJECTIVES. For those of you with questions, feel free to call me at 203.966.2712 or visit www.caimllc.com   *Please pass along this newsletter to friends and family*  to spread the word!

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