It’s Not Too Late to Implement These Tax Savings Tips for 2011
1/20/12 at 6:29
It’s hard to believe we’ve approached the end of another year; I don’t know about you but I seem to lose track of time the older I get!
Generally, it’s about this time that people start thinking about the upcoming year and their goals and/or resolutions for the next twelve months. However, there is ONE date that people generally DON’T want to think about and that’s the dreaded April 15th (actually you’ve got until April 16th since the 15th is a Sunday next year)!!
Now, there are two ways to approach this time of year: 1. You can stick your head in the sand and pretend that somehow April 15th won’t arrive OR 2. You can take a proactive stance and perhaps still save yourself some money in 2011
Which would you prefer? If you’d rather stick your head in the sand, there’s not much I can do to help you and you might as well stop reading this post right now; however, if you’d like to save some of your hard earned money, let’s get started…
If you own your own business, here are a couple of ways that you can save money for 2011:
If you expect your 2011 income to exceed 2010, are there 2012 expenses that you can accelerate and pay before December 31, 2011 to soften the blow or Are you still expecting income to arrive before December 31st that you could shift into 2012, achieving the same tax savings affect? In summary, accelerate expenses or defer income, if possible.
If you don’t own a business, that’s OK; you can save some money, too, prior to the end of the year:
Are there charities that you’d like to donate to? Make sure the checks are dated prior to December 31st. You can save additional money if you live in one of those states that allow a credit for donations to certain charitable organizations. Are you one of the lucky few anticipating a bonus for 2011? If you haven’t prepared for that additional income, it could push you into a higher tax bracket; is it possible to defer until 2012? Have you had years of stock losses piling up? Normally, you can deduct only $3,000 per year max of those accumulated losses; however if you’ve finally got some winners resulting in capital gains, you might want to think about selling before December 31st to shelter those gains with your accumulated losses. If you have an IRA, you have until April 16th, 2012 to make a 2011 contribution; if you’re under the age of 50, you can normally contribute a maximum of $5,000; for those of you 50 and older, you have the opportunity to contribute a maximum of $6,000. Consult your tax advisor about your eligibility to contribute as there are restrictions. Here are just a few tax savings tips; this list is not meant to be all-inclusive and I strongly suggest you consult your own tax advisor before implementing any of these strategies.
I wish you all a Happy and Prosperous 2012!!
-Diane Aksten
