Filing your 2007 tax return might signal the official end of 2007, but for tax-savvy individuals, it’s also the signal to start tax planning for 2008. Getting an early start on your 2008 tax planning will help you take maximum advantage of the latest tax breaks, inflation adjustments, and retirement options.

* First, you should always commit to maximizing your retirement plan contributions, if you are able. This will lower your 2008 taxable income and enhance your nest egg to boot. If you have an IRA, consider making contributions earlier in the year to reap extra tax-deferred earnings.

* Second, minimize any surprises next year by examining your paycheck withholdings now. Are tax withholdings on track with your current financial situation? A large tax refund or amount due on your 2006 return might require an adjustment to your Form W-4 for 2008. Additional factors to consider include recent changes to family income, a new home, or children no longer qualified as dependents.

* A law enacted in 2006 extends the age threshold for taxing children’s unearned income at the parent’s higher tax rate. This might be a good year to consider a 529 college savings plan as an alternative to transferring funds directly to a child’s account.  Additionally, the state of Georgia has expanded its deduction for contributions to a Georgia 529 college savings plan.

* Don’t forget to take advantage of available energy tax credits this year. Qualified home improvements can trim your utility bills and lower taxes at the same time.

* The most common tax-related resolution – and the hardest to keep – is a vow to maintain better tax records. The deductions for higher education expenses and teacher’s out-of-pocket expenses have been reinstated for 2008. These and other deductions and credits could be lost if you don’t have a satisfactory recordkeeping system.

Give us a call for guidance in implementing the best tax planning strategies for your particular situation.