|
Page 1 of 2
The Tax Man is on his way to get his pound of flesh and the only way to evade him or at least cut down on his bite is to start taking defensive measures before the end of the year. The clock is ticking away and you have just a few weeks left to build up your defenses and reduce your tax bill to the IRS. Aside from maxing out on your IRA or 401K, here are few additional moves you can make.
Get updated info on 2012 Tax Changes now.
1. Assemble Your Records Now
One of the surest ways to pay more taxes is to forget to list all the credits and deductions that you are allowed. A year is a long time and what you gifted in February might be forgotten by now. There have been a lot of changes in the tax code this year. Many of the credits and deductions are one-time special offers that were part and parcel of the Economic Recovery Act. So, whatever you do, don’t just pull out last year’s tax return and use it as a blue print to fill out this year’s tax forms.
2.Car Purchase?
If you buy a car before year-end, you can deduct both the sales tax and the excise tax on your 2009 tax return. You have to have purchased the vehicle between Feb 17 and Dec 31, 2009. The vehicle can’t be over $49,500 but with all the special offers out there, that shouldn’t be a problem for most buyers.
3.Weatherproofing
This year, you can get a 30% tax credit - up to $1,500 - for insulating your house or installing energy efficient windows and doors, skylights and certain types of roofs. Even certain appliances might qualify for this credit (high-efficiency heat pumps, air conditioners, water heaters, and stoves that burn biomass fuel.) So if you want to max out on this credit - you need to spend about $5000. If you don’t have the time to install them right now, at least buy the supplies and raw material or pay a trusted contractor upfront.
4.Flexible Spending Accounts
If you have a Flexible Spending Account (FSA) to cover the cost of deductibles and health insurance premiums, make sure you use that money by December 31, 2009. Even if the bill for medical services arrives in January, you’re still eligible if the service was performed before year end. FSAs can be used for all kinds of stuff including aspirin, antacids, and even $300 prescription sunglasses.
|
