I recently received a really relevant email for me, and thought you would love to read these great tips from Bob Meighan (TurboTax CPA and VP) to help you make smart choices at the end of the year so you will pay less taxes or get a bigger refund when you file your 2010 taxes.
You can take advantage of these credits before December 31st:
- Make your home more energy efficient – It can slash your tax bill by up to $1500 and some states are offering cashback on energy saving appliances like EnergyStar washers and dryers.
- Donate to charity -get rid of all the extra toys, clothes that don’t fit, or that knick knack Aunt Edna gave you for the holidays that you can’t bear to regift.
- Max out your retirement contributions if you haven’t already.
- Flexible spending accounts allow you to pay medical expenses not covered by insurance with “pre-tax dollars”. Any money you have in these accounts must be spend or lost. Over the counter drugs no longer eligible in 2011, now is a good time to purchase things like band aids, first aid kits, and more.
- Invest in your child or grandchild’s college education by contributing to a 529 college savings plan. This can lower both your federal and state taxes in some cases.
The President recently signer an extension of the Bush tax cuts which reinstates many provisions scheduled to expire on December 31st, 2010 including:
- The American Opportunity Credit â€“ This allows college students and their parents to save up to $2500 on their taxes.
- Teachers Tax Credit â€“ Teachers who purchase classroom supplies can write off costs up to $250.
- Child Tax Credit â€“ The $1000 child tax credit per child under 17 years-old.
Do you have any other year end tax tips?
To see if you may be “at risk” for an audit check out Yahoo’s article on IRS red flags for audits. It provides some great info especially relevant to small business owners, and self employed people (like me!).