Strategies: Do this now to reduce your tax bill in April

If you know you already have a loss or, perhaps you're in a countercyclical industry, and it looks like 2009 is going to be a banner year, then try to keep as much income in 2008 and push off deductions until January. This will have the result of lowering your 2009 taxable income without having a negative impact on this year's.

4. Be cautious. Even if deferring income is a good tax idea, be careful this year. With current economic conditions, there's greater risk your clients may not be able to pay, may pay far more slowly than usual, or may even close or go bankrupt. In fact, you may want to give customers incentives to pay right now even if it has negative tax consequences. After all, it's far better to pay taxes on income — even at a higher rate — than to lose the income altogether.

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Likewise, I'm cautioning you to be particularly conservative about "increasing expenses" even if there's a tax advantage. Guard your cash and credit carefully.

5. If you need to accelerate expenses, here are some to take care of now:

• Pay January mortgage or office rent.

• Prepay state and local taxes.

• Prepay other necessary January expenses.

• Prepay conference registrations and subscriptions.

6. If you need to delay income, don't send out invoices until Jan. 1 or otherwise receive payment until after the first of the year.

7. Open a qualified retirement account. You've got until April to fund it, but you have to have it established before the end of this year.

8. Call your tax adviser today. Yes, I know it's the end of the year, but many CPAs are in their offices because their clients are calling.

9. Make charitable contributions. Don't forget that charitable gifts are tax deductible. This year, charities are hurting when the needs are greatest. Share the holiday spirit with those in need.

Rhonda Abrams is president of The Planning Shop, publisher of books for entrepreneurs. Her newest book is Successful Marketing: Secrets & Strategies. Register for Rhonda's free business tips at www.PlanningShop.com. For an index of her columns, click here. Copyright Rhonda Abrams 2008.