Time For Your Year-End Tax Planning; Weigh Prepaying Bills; Deductions strategy is based on whether you'll pay regular tax or AMT.(FUNDS & PERSONAL FINANCE)

Publication: Investor's Business Daily

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COPYRIGHT 2004 Investor's Business Daily, Inc.

Byline: PAUL KATZEFF

This year, a checklist of year-end planning steps is likely to be extra long. That's because of the flood of rule changes enacted in 2004.

To help organize your planning process, today we'll look at topics whose rules remain the same. The next time we tackle the subject, we'll deal with how your strategic moves might be affected by new rules.

Start with the basics.

"Calculate your regular tax and alternative minimum tax," said Bernie Kent, tax partner for PricewaterhouseCoopers.

The reason: Most deductions allowed in your regular tax calculation can't be used in figuring your AMT bill.

So if you'll be subject to the AMT, decide which spending and deductions to put off until next year.

The opposite can be true if you're subject to the regular tax this year.

"You'll want to...

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