Ten Tax Tips for Year End

Tax Act

Ten Tax Tips for Year End

Trimming your tax expenses is very important today as many are struggling in this economy to pay their bills and afford some luxuries. That is why doing these 10 things before the end of the tax year is very important. Don’t wait until it is time to prepare your taxes to start thinking about reducing your tax liability, start planning and preparing well in advance.

New Tax Breaks: Make sure to check the tax code when it becomes available in fall for new tax changes that may affect you and follow any new federal tax laws that are passed this year that provide new ways to save on your taxes.

Accelerate Deductions: If you pay estimated tax payments during the year, pay your first payment for next year this year. This will give you the tax advantage in the current year. You can even pay the estimated taxes with credit and quickly pay it off after you receive your refund.

Delay Income: If you are self-employed or run a small business on the side, wait until January to bill your clients. That way the income becomes taxable next year instead of being taxable in the current tax year.

File your Taxes on Time: Avoid penalties and interest by filing your return on time. An extension only delays the filing of the return, the taxes due are due on April 15th regardless of filing a tax extension. You will need to estimate the taxes you owe when you file the extension and send the IRS a check.

Pay Medical Expenses This Year: By grouping your medical expenses into the same you may qualify for the medical expense deduction. This has a 7.5% floor that you must get over to qualify. So if you have one procedure early in the tax year, try to have another needed procedure during the same tax year to get the deduction.

Make an Extra Mortgage Payment: Pay January’s mortgage payment in December to get the interest deduction this year. Of course you will be light when it comes to interest paid next year, but getting the deduction a year early is worth it.

Offset Investment gains with Losses: If you cashed out investment gains in a taxable account this year, make sure to cash out some losing investments before the year ends so your net income on the sales is close to zero.

Property Taxes: Like your mortgage payments, you can pay your property taxes early and get the deduction in this tax year. These two early payments can make a big difference in your tax return when you file next year.

Gift Giving: You can make charitable gifts to organizations and churches before the end of the year and get a nice deduction. Also consider giving gifts within the gifting limits prior to the end of the year to children and grandchild.

Retirement Contributions: This tip can be completed after the end of the year as long as all contributions are made by April 13th. Plan ahead into what kinds of retirement accounts you will make contributions to get the maximum tax benefit this year and when you withdrawal the money in retirement.

You Won the Lottery, Avoid Paying Taxes

Tax Act

You Won the Lottery, Avoid Paying Taxes

The IRS has come out with a list of helpful tax tips about your lottery and gambling winnings. Although all gambling winnings are taxable, you can avoid paying taxes on your winnings if you can document gambling losses of the same amount.

Winnings from lotteries, raffles, races, and casinos including prize items are all taxable, that is the bad news. Sometimes the establishment with which you won the wager will automatically deduct taxes and provide you with a W-2G to file with your taxes. Report all your winnings for the year on line 21 of the 1040. Filing the 1040 long form is required when you have gambling winnings.

File a Schedule A also, where you itemize the losses you have also had. Keep documents from the events with which you lost money and total the amounts wagered on line 28 of the form. You can make all your winnings tax free if you have enough losses to offset them. None-the-less you can reduce the tax expense with the losses you do have.

Check the Status of Your Tax Return Now!

EasyTaxReturns.com Offers Free eFiling

Tax Act

EasyTaxReturns.com Offers Free eFiling

If you’re looking for an online electronic tax return filing option, take a look at EasyTaxReturns.com as they have several very good programs which include free eFiling with your return. Their tax return application is guaranteed to be 100% accurate, it is easy to use, and you don’t need a credit card.

Two Different Packages

EasyTaxReturns.com offers two different packages depending on your needs. Their Standard option includes your 1040 federal tax return, state return support, easy to use tax forms, and around the clock support. Their Deluxe package includes the filing of you state return in addition to all the great features of the Standard package.

Tax Tips & Resources

Make sure to take a look at the company’s Tax Tips & Resources. They have detailed information about IRS e-filing, a tax guide, information on getting your tax return fast, tips on paying your taxes by credit card, and a number of financial calculators.


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