It’s the holidays, and on top of everything else you’re shopping and entertaining.
Why not give yourself a gift by taking a moment to look at your personal finances?
We can all use a few more dollars in our pockets at this time of year, right?
The following tips can save you money when you file your tax return for 2011.
Retirement: Take a look at your 401(k) or 403(b) and see if you’ve maxed out for the year. The limits are $16,500 if you are under age 50 and $22,000 if you are older. Let’s say you’re in the 25% tax bracket you choose to deposit an additional $5000 into one of these accounts before the end of the year. That will save you a nice $1,250 on your 2011 tax filing. And remember, if you have a Roth IRA you can contribute to that too. It’s not a tax deductible contribution, but the Roth IRA is an incredible deal that grows tax-free for retirement. And, for the 2011 tax filing season, you can contribute to your Roth IRA until April 15, 2012.
Shifting income: Shift income into next year if you want to defer paying taxes on it. To determine how to do this, speak to a CPA, an EA, or other qualified advisor.
Lump your deductions. The medical deduction is often an overlooked write-off. I don’t want any of my clients to need this, but for some it comes into play. If you think you’ll have significant medical bills in 2012, think about prepaying them for 2011, and take advantage of the bigger deductions. The same goes for business expenses. If you have a small business, and you need office equipment, you can buy it on credit now and pay that credit bill in January 2012.
Cut Your Losses: If you’re looking to unload stocks or other investments that aren’t working out (and aren’t held in retirement accounts), sell them before the end of the year and take the loss on the 2011 return. Any gains you already have will be offset by these losses.
Wishing you and your family a great holiday season! And, please shop and eat locally whenever possible!
PODCAST OF THIS TOPIC! Click one of the links below to listen to Stu discuss this topic with morning guy Win Damon on wnbp 1450 am on your radio dial or listen live online at wnbp.com every Tuesday morning at 8:30.
Listen here if you are an apple computer user