Last-minute tax tips

While we still do not know the year-end tax changes, here are some smart tax moves you can make in December.

No matter how crowded your calendar is this month, be sure to make time to consider some tax-saving possibilities. 

  • Check your 2010 tax payments, and if you haven’t met the minimum requirement, increase your withholding before year-end to eliminate or reduce underpayment penalties. 
  • Consider converting your traditional IRA to a Roth before year-end. You can elect to pay the tax over two years’ tax returns, 2011 and 2012, or pay in full on your 2010 return. 
  • Buy needed equipment for your business before year-end to utilize the first-year expensing option of up to $500,000. Bonus depreciation of 50% of the cost of equipment is also available for 2010 purchases.
    • Expensing applies to both new and used items; bonus depreciation can only be taken on new equipment.
  • Use your credit card to pay tax-deductible expenses by December 31 if you’re short of cash. You can deduct the expenses on your 2010 tax return even though you pay the credit card bill in 2011. 
  • Review your investment portfolio to decide whether you should sell some losers to offset gains already taken or vice versa. Any excess loss can offset up to $3,000 of ordinary income. 
  • Make energy-saving improvements to your home that will qualify you for a tax credit of up to $1,500. 

Contact us for details on any of these suggestions or to discuss the tax-cutting options best suited to your situation.

This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s