The sun starts going down before dinner. Pumpkins are abundant, and TV is filled with football.
What else could it be but autumn? Well, to many a household money manager, it's also year-end tax planning time. Again.Not exactly a poetic thought, perhaps. But experts on the subject say it compensates with plenty of dollars-and-cents practicality - doing what you can before the year is over to minimize what you must pay in income taxes next spring.
"By planning income and deduction strategies, you may be able to reduce your tax," notes the annual guide J.K. Lasser's Your Income Tax. "If you wait until you prepare your tax return, you will be unable to develop tax-reduction strategies."
In the past 10 years or so, the tax-planning mission has often been muddled by frequent changes in the laws. "Nevertheless, it is as important as ever," says the accounting firm of Ernst & Young.
"Basically, what year-end tax planning boils down to is making sure that what shows up on your tax return on the line `amount due' is as low as possible."
That typically means postponing the receipt of income wherever possible, and accelerating deductions by such measures as making a charitable contribution earlier than you had planned.
In theory at least, what you gain for 1991 is merely borrowed from your tax accounts for 1992. But "you save a year," says Ernst & Young in a just-published booklet on tax-savings strategies. "And money has a time value."
Workers who earn wages and salaries are often limited in what they can do to postpone income. But they may ask employers to delay year-end bonus payments or some overtime pay.
A self-employed worker can pursue the same goal by strategies such as waiting to bill a customer until after year-end.
Taxpayers may have more control over the timing of their deductible expenses. But with these, the ideal choice isn't always a matter of making them sooner.
For instance, in cases where a household's itemized deductions barely match the standard deduction, advisers urge itemizing in alternate years and seeking to concentrate deductions in those years.
Even for those who itemize every year, advisers recommend bunching outlays where possible on items such as medical and miscellaneous expenses, which can be deducted only after they exceed a certain percentage of gross income.
"If it appears you will not exceed the floor this year," Ernst & Young says in its discussion of miscellaneous deductions, "defer these expenses until next year if you can."
For taxpayers with six-figure incomes, planning this year may also be influenced by new rules limiting the itemized deductions and exemptions they may take.
Another way to reduce this year's taxable income is to sell investments on which you have paper losses before the end of the year, or to wait until January before selling at a profit.
One thing you can't do, however, is to sell a losing investment and buy it back again within 30 days of the sale. This is known in Internal Revenue Service parlance as a "wash sale."
Says Ernst & Young, "The easiest way to maintain your investment position in a security, recognize a loss, and avoid the wash sale rule is to buy identical securities 31 days before you sell your old securities at a loss.
"Another possibility is to reinvest in a similar security that would not be considered `substantially identical.' For example, if you sold your investment in a mutual fund of bonds, you could reinvest in another fund that owned bonds of a similar grade and yield."