, December 6, 2011 2:58 pm
OK…there’s less than 30 days before the end of 2011. That means, you don’t have much time to think about what you need to do to save money on your income taxes next April. I know you don’t want to think about from Form 1040, but what if you could save some money? So, here are a few quick ideas for you to ponder before December 30th (the 31st falls on a Saturday):
* Are there any investments you can sell that will generate a loss? You can claim investment losses up to $3,000 per year and anything over that amount can be carried over from year to year to offset gains. Nobody knows what the capital gains rate will be after 2012 (currently 15%), so even if you sell an investment and have no losses to offset, the tax owed may be minimal and worth paying if you need to cash out of something
* If you’re self-employed, 2011 expenses must be taken by the end of this month if you want to reduce your taxable income. If you’re able to project income this year vs. next year, will you get a bigger bank for your buck if you bunch your expenses after January 1st?
* Energy credits were extended through 2011. If you install insulation, windows or energy efficient heating or air conditioning units may qualify for up to $500
* Section 179 for business owners. This one allows you to write off up to $500,000, but only through the end of the month, for machinery, equipment and vehicles placed into service. In 2012, this drops back to $125,000
* If you are able to prepay college tuition for some of 2012, you may qualify for the American Opportunity Tax Credit. The maximum credit is $2,500. You’ll have to have an Adjusted Gross Income of $160,000 if you’re married and filing jointly or $80,000 if you file as a single. This would ease the pain of big tuition bills
These are just a few ideas to think about. But don’t think about it too long. Be sure and check with your tax preparer to firm up your course of action. As with so many things in life, a little planning goes a long way. Good luck. Until next time, here’s to good planning!