FINANCIAL FOCUS: TIME TO THINK ABOUT YEAR-END TAX STRATEGIES

This "Financial Focus" column is prepared by Edward Jones Investments, headquartered in St. Louis. Jones includes branches throughout the nation, including Cape Girardeau and Jackson.

As another year draws to a close, you may be asking yourself a couple of questions. First, "Where does the time go?" And second, "Can I still do something about my taxes?"Although you can't do anything about the rapid passage of time, you can still employ some tax strategies that can help you on April 15. Here are a few suggestions:* Time your mutual fund purchases. If you plan on buying mutual fund shares this year, you may want to wait until after your fund declares its capital gains distributions, which usually is in early December. Otherwise, you'll be liable for a whole year's worth of capital gains, even if you only held the shares for a brief time. On the other hand, if you plan to sell shares, you'll want to do so before your fund reports its distributions.* Maximize your retirement plan contributions. If you haven't yet contributed the maximum allowable amount to your 401(k) or other employer-sponsored qualified retirement plan, you might want to do so. These contributions are made with pre-tax dollars, which will lower your annual taxable income. Plus, your earnings will grow on a tax-deferred basis, which means they will accumulate faster than they would if they were invested in a taxable account with a similar yield. In addition to fully funding for your 401(k), you may also be able to put in more to your "traditional" IRA. Depending on your individual situation, these contributions may be tax deductible. (You have until April 17, 2000, to make IRA contributions for 1999.)* Make charitable gifts. By making a charitable gift to a qualified organization by year-end, you can get an income tax deduction for the year. If you transfer an appreciated asset that you have held. Over one year, such as a stock or a piece of land, you also will avoid capital gains taxes in the future.* Look for a tax-favored investment opportunities. If you think that your investments are generating too much taxable income, consider exploring some tax-favored vehicles for next year. For example, you may be interested in tax-free investments, such as municipal bonds. (Earnings from Roth IRAs also grow tax-free, provided you meet certain conditions.) Or you can consider tax-efficient investments, such as mutual funds that do little trading, thereby generating relatively small amounts of capital gains.

By taking these steps, you may be able to brighten your tax picture considerably. As with all decisions regarding your taxes, consult with your tax adviser before taking action. Because everyone's situation is different, not all strategies will be equally effective but some of them may well work for you.

The Southeast Missourian does not recommend that readers buy or sell stocks featured in this column, which is provided for informational purposes only.