Creative Ways To Lower MAGI for 2009 Conversion
Have just discovered I’m very close to slipping in under the 100 k ruling .
Want to make sure I’ve exhausted all possible options for qualifying . We are small business owners.
Any creative ideas or unusual things that are not obvious to me ?
1. employee piece of 401-k , advance normal business expenses , delay deposits at year end … yes
2. charitable contributions …NO ???
3. Any ideas out there ??????
Permalink Submitted by mk foss on Wed, 2009-08-12 01:28
The employee deferrals to a 401k are supposed to be determined at the beginning of the year – you shouldn’t be able to accelerate them.
IRS wouldn’t like small business owners to delay deposits at year end – there are constructive receipt issues. You could delay December invoices or give a one time change in payment terms.
Prepaying expenses always is a possibility. Prepay the rent; order additional office supplies, stock up on deposit receipts and blank checks, charge up the postage meter etc etc
Charitable contribuions do not reduce adjusted gross income.
If you have mutual funds, you could sell them before they pay the December dividends – presuming that any gain would be less than the dividends you’re avoiding.
Taking losses on capital assets gives you a deduction of up to $3,000 a year after offsetting capital gains. Disposing of business assets at a loss can produce an ordinary loss which is deducted in full.
Others may have some more ideas.