Ten Tax Tips for Year End

The time to start getting ready for your tax returns is now. Do not wait another minute. To save the maximum amount money start preparing today using these ten tips. It will help you minimize your tax debt even in this economy.

There are several newer tax breaks that many people do not know about. Each fall you should check out the new tax changes so that you are ready to take advantage of them on April fifteenth. You can easily access this information by checking out the IRS web site.

Paying estimated taxes throughout the year is how some people handle their tax debt. If you do this then accelerate your first estimated payment for the following year to this year's tax season. This accelerated payment will give you a advantage in this year and can be quickly paid off in the next year. It can even be beneficial enough that it is worth it to borrow the money to make the payment.

For those people who are self-employed or have small businesses wait until the next tax year to send out bills. This moves the taxable income to the next year and deceases the taxable income of this year. This delayed income can be a big boon if you are running close to going up a tax bracket.

Always file on time. Penalties and interest created by filing late are an unnecessary expense. Taxes are considered due on April fifteenth regardless of being given an extension. So for every month you go over the fifteenth you will pay much more money. If you must file late the go ahead and pay your estimated taxes on the fifteenth.

There is a medical expense deduction. You must have paid out more than seven and one half percent of your overall income in medical expenses. So you can see that this will only work if you have a lot of medical expenses. Make sure to include gather all your expenses together. Medications, deductibles, lab work and anything you can come up with.

Think about the possibility of paying an additional mortgage payment. It allows you get the interest deducted a year early. You do have think carefully about in which year you are going to need the deduction the most before jumping in with this strategy.

If you took the opportunity to sell off your investments and had gains to report make sure to also sell off some of your losing investments. This way it offsets your gains and leaves you with a zero gain in income.

You can also choose to pay property taxes for the next year in December in order to take the deduction this year instead of next year. Just like making early mortgage payments you have to think carefully about which year you need the deduction the worst in.

Charitable donations are a good thing to do in order to get those last minute deductions. Make sure you donate enough to do any good. Your tax preparer can tell you exactly how much you need to donate. Donations can be in the form of cash, clothes, cars and many type of items. Make sure that you get receipts and do not over estimate the value of your items.

This last tip can even be contributed after the year has ended. As long as all your contributions have been made by April thirteenth they count. Plan ahead in order to be comfortable with exactly what you need to do. All of these tips can help you make the most of you deductions but you need to closely assess exactly what will work for you.