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Show 8A Sun Advocate, Price, Utah Tuesday, December 21, 1993 Utah accounting firm publishes financial planning pamphlet many Americans, some smart financial planning now can ease the burden on April 15 and beyond, explains Blaine Nelson, tax partner-in-charg- e of the Salt Lake City office of Deloitte & Touche. As 1993 draws to a close, smart taxpayers should analyze their own financial situations and begin to focus on four guiding tax principles for the 1993-9- Despite higher income tax e rules rates, new on capital gains income, limitations on itemized deductions and increased alternaanti-abus- tive minimum tax (AMT) rates, there still are ways to minimize the 1993 tax burden between now and the end of the year, according to Personal Tax Planning 1993-94- , recently published by Deloitte 1 & Touche. season. According to Nelson, the guiding principles are: First, maximize the advan Although the new tax law is complex and will no doubt increase the taxes owed by tage of tax deferral. Second, manage investment portfolios with an eye on saving taxes. Third, take advantage of the greater value of deductions created by the new tax Fourth, when appropriate, shift income to family members with a lower tax rate. The following is a brief look at how each of these strategies can be employed: Defer income that would ordinarily be paid in 1993 (IRA). Opening a Keogh plan if you are self employed. Participating in a nonqualified deferred compensation plan offered by an employer. Participating in some form of employer-sponsorestock option plan. Each of these options prod vides taxpayers with an opportunity to defer tax on income to a date when their personal income might be in retirement, perlower thus decreasing the haps tax that will be due. Deferring income into some savings program also enables to taxpayers invest their income before paying taxes and take advantage of years of compounding and growth without the burden of paying tax until the income is realized. Create an investment strategy that generates capital gains instead of ordinary income. Since cap- o 'r HOME FURNISHINGS Reform Act of 1986 to 28 percent and later raised to 31 percent in 1991, many taxpayers were satisfied paying the relatively low rates. With an increase in the top marginal tax rate to 39.6 percent and an effective rate that is even higher in some cases, deferral can become quite attractive. Some of the options that might be worth exploring are: Putting a portion of your income into a qualified retire law. CO f ment plan, such as 401(k) or savings plan. Contributing to an individual retirement account to a later year. When top tax rates were lowered by the Tax 1 ' i3l Hit - o (ot O 3 ( Of ital gains are taxed at 28 percent under the new tax law, as opposed to a top rate of 39.6 percent for ordinary income, it is possible for some taxpayers to change their personal f O investment income. Such a change in strategy also implies a change in portfolio risk levels, about which should consult their investment adviser. With taxpayers anxious to pay taxes at a lower rate, the United States Congress has e meacreated new sures to stifle some moves in this area. But there are ways to emphasize capital gains tax-pye- rs r U I i m i r 8 r1 ' k hh anti-abus- through careful Financial planning and save nearly 12 percent in taxes. Another way to lessen the tax burden is to invest in municipal bonds. 19" Remote Color TV Anniversary Clocks $49 to V 'iW Color TV J TgWT- L- r---. jS) fig) SCR620 Drawing Wednesday, Dec. 22, 1993 Remote Stereo No Purchase Necessary Time deductions for such items as mortgage interest, state and local taxes and charitable contributions so that they can be deducted in a year in which you have higher $20Q For example, if you expect your income to be lower in 1994, accelerate the amount 25" Remote with Stereo $qq Mr:j Rack System i omrmm .jrt $OQQ! 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Since individuals over age 13 are taxed at 15 percent on income up to $22,100, an option if you are in the 39.6 percent bracket might be to shift some income to your child, who would pay only 15 percent up to the $22,100 threshold. While every taxpayer has an individual financial situation to consider, many of these strategies are widely applicable and can be extrememly beneficial, even during periods in which tax rates are said Nelson. Accelerating a deduction or deferring income tax an individual will have to pay. Deloitte & Touche, the largest accounting firm in Utah, provides accounting and auditing, tax and management consulting services. KEYBOARDS FUTONS This shifting income from individuals to lower-brackchildindividuals climbing, ORIGINAL LCD These differences in tax brackets will again encourage ren, grandchildren and THE OKLY CAftlCOROEn THAT LETS YOU SHOOT AfJD Le Sauterne. Recliner Stereo $ 149 $199 I NOW ONLY 4 Head - 1. 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