Year end tax tips...do not close the year without reading this..

With a few days to end the year, you must not overlook this last minute tips to reduce your 2011 taxes.

Charitable Contributions – Itemize deductions, Schedule A, donations to qualified charities no later than Dec. 31 can be deductible for 2011.  Clothing or household items, must be in good used condition or better to be deductible

       Documentation required: canceled check, a bank statement, credit card statement or a written statement from the charity, showing the name of the charity and the date and amount of the contribution for all cash donations. Rules varied with the amount donated. Consult your CPA.

       Caveat: charges to a credit card by Dec. 31 are deductible for 2011, even if the bill isn't paid until 2012.

Energy-Efficient Home Improvements – Green-energy home improvements to qualify for either of two home energy credits.  What's included?  Generally, insulation, new windows and water heaters to your main home can provide up to $500 in tax savings.

Residential Energy Efficient Property Credit- another Green Credit.  The credit equals 30 percent of the cost of qualifying solar, wind, geothermal, or heat pump property.

Portfolio Adjustment – Very important, you must do this every year.  Generally  net capital losses up to the amount of capital gains, then again $3,000 from other income. The trick is on the carryforward; you must know how to do the matching on your portfolio and going forward planning.

Retirement Accounts – Elective deferrals for next year final date is Dec 31, 2011.  401(k) plans or similar workplace retirement programs. 

        -Do not forget to set up a new IRA or add money to an existing IRA and still have it count for 2011.  If 50 or over, up to $6,000, $1,000 more. 

Retirement Savings Contribution Credit-  Available to low- and moderate-income workers who voluntarily contribute to an IRA or workplace retirement plan. The maximum Saver’s Credit is $1,000, and $2,000 for married couples. 

Qualified Charitable Distribution – For TP who are 70½ or over, you can make a distribution paid directly from your individual retirement account to a qualified charity.  The maximum annual exclusion is $100,000.

      Mayor benefit is- can be used to satisfy any required minimum distributions. Available even if you do not itemize deductions.

Small Business Health Care Tax Credit – a tax credit of up to 35 percent of the premiums paid; provided you paid up to 50%+ of the premiums.  Employers with fewer than 25 full-time employees who pays an average wage of less than $50,000 a year may qualify.

Merry X-Mass and Happy New year, and remenber that most of you need to have a tax check up at least once a year.

Source: IRS.gov



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