If you have had any unusual circumstances or events happen in the last year that might affect taxes, give us a call or use our Contact Form to talk to one of our tax accountants. Now more than ever, specialized tax planning is a crucial component for every financial plan, whether its for a family or business.
As the end of the year quickly approaches, it is especially important to make sure you are taking advantage of opportunities to save money on your income taxes for this year. Fortunately, there's still time to save! Here are a few pointers:
Donations
Consider giving away any items you no longer need to the charity of your choice. Not only will this act of kindness during the holidays help clean out your closet, but making charitable contributions before the end of the year is also an easy way to save money on your 2011 taxes. Remember that you will need a written receipt for any charitable donation, regardless of the amount. If your gift is greater than $5,000 in value, please call us first as special rules address this part of the tax code.
Accelerate Expenses
If your business is on a "cash basis," an effective tax reducing strategy is to pay as many tax-deductible expenses as possible before December 31st, even if they're not due until next year. Any payments made before the end of the year will be deductible on this year's tax return. For example, you should consider paying any mortgage payments, property taxes, outstanding tax-deductible medical bills, state or local income taxes. Note that you can charge some of these expenses, such as medical bills, to your credit card(s) before the year ends. Even if the payment to the card if not made until next year, you still receive the deduction this year.
Defer Income
Another strategy to save on taxes for this year is to defer some income until January, if possible. If you are self-employed or an independent contractor, consider sending invoices for work done after the first of the year. If you are not self-employed, another option is to request from your employer to pay out any bonuses in January instead of this December. You can also consider holding off on selling investments with taxable gains until next year.
