Monday, January 30, 2012

Wednesday December 21. TaxACT Tax Tips. I used TaxACT the last two years and was able to do pretty well I thought.


Wednesday December 21. TaxACT Tax Tips. I used TaxACT the last two years and was able to do pretty well I thought. All the tax agencies are giving year-end tax-cutting tips for 2011. What they are forgetting is that most of us did not make any money in 2011!. The fact is that if your income is low this year, and you expect to make more in 2012, then you should do exactly the opposite of what they recommend. And thus it goes with tax planning.  

  1. Go green: This is the last month homeowners can qualify for a 10% credit on their 2011 tax return for making energy efficient improvements.

  1. Prepay Spring tuition: A taxpayer can receive up to $2,500 on college tuition and books for each qualifying student through the American Opportunity Credit.

  1. Make any big purchases by 12/31 if you live in a state with income tax: The deduction for state sales tax is set to expire this year unless Congress votes to extend it.

  1. Use up your Flexible Spending Account (FSA): If you still have money left in your FSA, don't let it go to waste.

  1. Make charitable contributions: Donating clothing & household goods by Dec. 31 for a deduction on your 2011 return. Donation Assistant in Deluxe provides fair market values & calculates the deduction.

  1. Accelerate payments that can provide tax deductions: You can claim the interest or real estate tax deduction in 2011 if you prepay your January 2012 mortgage or property tax bill by Dec. 31, 2011.

  1. Pay deductible expenses by credit card: If you charge expenses by Dec. 31, you can deduct them on your 2011 taxes even if you don't pay the credit card bill until January.

  1. Postpone income: If you can defer your income from 2011 into 2012, the income won't apply to your 2011 taxes. But note: you can't defer income by not depositing a check that was issued in 2011.

  1. Offset capital gains: If you have any investments that have generated deductible losses, you can use the losses of those you sell through the end of the year to offset any gains.

  1. Use TaxACT Online 2011 return now for help with the above situations and other year-end planning tips to help you maximize your refund. Sign in now to start today.

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