Being a CPA, I hear a lot of stories about people who choose to live without the benefits of good tax advice, often with unpleasant surprises come April 15th.  For instance, one of my colleagues has a friend who moved from Washington to Oregon in 2006. In Washington he owned residential rental property which was nearly fully depreciated. He sold the property shortly after he became an Oregon resident.

This meant he owed approximately $15,000 in Oregon state income taxes, since Oregon taxes its residents on income from all sources. Had he checked in advance, a CPA could have told him to sell before he was a legal resident in Oregon.      

Life’s simple when you can see ahead, and when it comes to taxes almost everyone can see ahead - if you take the time. Here’s my favorite autumn tax tip: Call your CPA. You should do so if you answer yes to any of these questions:

•    Do you have capital gains or losses on investments inside of taxable accounts? Have you sold or purchased real estate?

•    Will you maximize your 401(k), 403(b) or SIMPLE-IRA before year-end?

•    Are you considering making an individual retirement account (IRA) contribution?

•    Do you need to take a required minimum distribution from a retirement plan?

•    Are you considering making a large charitable donation or a gift?

•    If you are self-employed, have you considered the timing for cash receipts and the timing for making disbursements (such as capital purchases)?

•    Have you married or divorced?

•    Has there been a birth or death in your family?

•    Do you have tuition bills – either for yourself or your dependent children?

•    Are you considering making a large purchase such as a new vehicle or home remodel before the end of this year?

•    Are you potentially liable for the Alternative Minimum Tax, a separate tax calculation with its own rules which disallows a number of common deductions and exemptions?    

There’s still plenty of time for effective 2007 tax planning.  At the very least, you can set some money aside and avoid the unpleasant surprise faced by the man who moved to Oregon.

Rick Miller has been a CPA since 1992. He has expertise in the areas of business transitions, professional practice firms, retirement plans, mortgages, agricultural and timber issues as well as tax returns for individuals, partnerships and corporations.