ExecPlan Express Personal Financial Planning Software Releases its Newest Version to Help with End-of-Year Tax Planning for 2010

PRINCETON, NJ, November 21, 2010 (Press-News.org) At the beginning of every year there are stories abound on tax tips to help you reduce your tax liability. These stories inform on changes in tax laws that provide tax credits or deductions that have not been previously available. They may also give some insight on tax saving strategies for retirement planning or educational funding. The catch is you have to act before the tax year is over, and that time is coming fast. The best tax and financial planning advice is simple - plan ahead. This year congress has made it a little more difficult because of their inaction on the "Bush Tax Cuts" as well as fixes to AMT, but there are still practical steps that most people can take, even with these future unknowns. For 2010 there are a couple of basic things that almost anyone can do to minimize tax liability now and over the long haul. Some of these tax and financial planning strategies are only available for 2010, you will not be able to use them in future years, so now is the time to take action.

First, one size doesn't fit all, nor does any tax or investment advice result in the same benefit for everyone. So get your best estimates on major items for 2010 and check out your strategies. With a pad and pencil you can do some basic analysis if dealing with 4 or 5 items. Anything more than that will require you to either build a spreadsheet for a definitive analysis or get an off-the-shelf financial planning software that incorporates necessary and specific federal and state tax computation. This will allow you to see how a specific tax strategy will affect your long-term financial position or what investment and tax planning strategies will best help you meet your retirement planning goals. Avoid retirement planning calculators or goal based retirement planning software. They are too simplistic and are designed to evaluate only the most basic retirement planning analysis. You can find several personal financial planning software tools used by professional advisors, accountants and insurance agents on the Internet that provide free trial versions that will allow more than adequate time to assess your own financial concerns. A good example is ExecPlan Express Tax and Financial Planning Software which can be found at www.execplanexpress.com along with a free evaluation copy, detailed tutorials and sample reports. Though the software was developed for professional financial advisors it has an intuitive design that makes it easy for the consumer who wants to take control of their own personal finances. At $299 it is also relatively inexpensive for those who want to continue using it beyond the 30-day trial period. "Professional planners have been our core clients for the past 30 years," says Robert Fourman, Director of sales for Sawhney Systems, "however we have seen a substantial number of individuals seeking out our product to manage and evaluate their own personal finances and create their own retirement and tax planning strategies."

Once you have a financial planning software to project your income and estimate your tax liability, you are ready to explore two of the biggest tax breaks for 2010. First is a Roth conversion. Most people are aware of the benefits of a Roth, including tax-free growth, no required minimum distributions and tax-free distributions. There is also the benefit of providing liquidity for potential estate tax planning which may be important if and when the estate tax returns. The downside is that the conversion means you pay the tax now and the taxable income is on top of your current income. You must also pay the taxes from another source, not from the Roth conversion itself. This means that the income from the rollover will be taxed at your current tax bracket or even at the next higher one. However, for 2010 the income from Roth conversions can be split and applied over 2011 and 2012. This provides the consumer two benefits. First splitting over two years may help keep more taxable income in lower brackets, and secondly since the tax is not due for 2010, this provides a one to two year grace period before the tax is due. This is where a flexible financial planning software tool where allow you to look at if it makes sense to do the Roth Conversion at all, how much it might cost in up front additional taxes, and whether it makes sense to elect to take the taxes over 2 years or one.

The other big tax break for 2010 is the reduced capital gains tax rates. If you are a retiree or any individual who has low taxable income or can defer ordinary income from 2010 to a future year, then this may be a real money saver. For 2010 capital gains rates are as low as 0% if you are in the 10% income tax bracket and 5% if you are in the 15% bracket. So a married couple both at age 65 not collecting social security yet, and taking the standard deduction, could earn $100,000 in capital gains and owe less than $2000 in taxes, while in 2011 that same filer in the same tax position will owe almost $10,000. For individuals who have any appreciated stocks, this is the year to sell them.

With either of these strategies as well as any additional tax planning advice, you need to see how well it is suited to your specific situation before taking action. Though these breaks can benefit most people, they will benefit some more than others, and the benefits may be immediate or long term or both. The best way to really evaluate what will work best is to crunch the numbers with your own personal financial planning software or seek a professional financial planner to help guide you to the right answers.

Sawhney Systems is a provided of comprehensive financial planning software for the professional financial advisor. For information on our products ExecPlan and ExecPlan Express please contact us at (800)850-8444 or http://execplanexpress.com.