Tax filing and preparation
is not an easy business, but it needs profession services of a tax accountant
or a CPA. From financial planning to money management tips and money issues, it
is essential to plan your income tax filing in advance. So the end of the
financial year is close and this may be the last attempt to utilize all
available benefits to save tax. Some of the best tips to save tax include:
With Christmas around the
corner, open up your purse strings and donate. This is the last time within
this year that you can give for charity and get the tax benefit for this year.
You may have already contributed to other charities through the year, so it may
be a wise decision to go over and check your account books or donation receipts
and see if your donations have reduced the tax liability or do you need to make
a few more.
If you have had a good
capital gains income, it is best to save tax by selling off your bad
investments or loss making stock options. Thus, you are eligible to claiming
capital loss and can save a part of the tax on your income. While some of the
losses can be offset against some of the capital gains. Though there is a $3000
limit but you can carry it forward for the next years tax accounting.
Get the Upgrades
Have you been thinking
about energy upgrades in your home? Green energy upgrades not only help you aid
conservation of environment but energy efficient upgrades are eligible for tax
deductions. So, it is a good idea to do it within this financial year as 2009
has higher deductibles and more credits available for better energy upgrades.
Setup 529 plan
The 529 Plan come with
added values of large tax benefits. So if you have kids, you can consider
putting in the maximum contribution and enjoy some tax savings. The extra funds
can go in to pay for future college funds.
Early Payments on Taxes and Mortgages
The best method to lower
your taxable income and get better deductions is to pay off your mortgage and
property taxes early. However, it may add up to a higher tax bill for the next
financial year but for now it will be one less bill payment and tax saving.
Enhance 401(k) payments
Contribute the maximum you
can to 401(k) or other tax saving plans so that you get maximum tax exemption
before the financial year ends. Not only will it be tax saver but help you add
up on retirement funds.
With the year end round
the corner, it is best to plan
your taxation for this year end and the new financial year
beginning. By calculating the total income for this year and getting an
estimate on your remaining taxable income, you can calculate the due tax and
investment measures that can help you save tax. . Having a CPA or a tax advisor
can help you save thousands of dollars that you can invest in your own business
for added profits.