Hopefully, you followed some of the suggestions we outlined last year to organize your records. If you did, great! This will make filing your tax returns a lot easier this year. It also means that you and your tax advisor can spend more time on tax and financial planning issues for 2011 vs. looking back to 2010.

The economic conditions of 2010 have been particularly brutal for many small business owners. When business expenses exceed business income it can create what is called a Net Operating Loss (NOL). In very limited circumstances an individual taxpayer can also realize a NOL, but that discussion goes beyond the scope of this Tax Tip.

Highlights of Proposed Legislation – Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 – HR 4853

We are going to take a break from tax planning this week. Instead, the family of Bradstreet & Company would like to wish you and your family the most joyous holiday season and best wishes for 2011.

Go through your house and garage and see what items you have not used in the last two years and donate them to charity. You can clean out space for all the new toys that are coming and receive a tax deduction for it!