5 Common Year-End Tax Tips

As the whirlwind calendar year of 2009 approaches an end, saving money on taxes will no doubt be at the top of the list and an area of concern among all, especially considering the current state of our economy.  Now is the time to direct your attention and begin to think about implementing tax saving strategies to help reduce and possibly eliminate tax burdens- just remember to take advantage before December 31, 2009.

There are several things that you may be able to do to lower your tax bill and minimize your income taxes.

5 Year-End Tax Tips

  1. Assess Your Income, Expenses, and Potential Deductions: First take a moment to look closely and see how much you spend, earn, and save, and then you can determine your deductions.  This will need to be finished before any adjustments are made.
  2. Review Your Portfolio: Capital Gains Tax is just that, a tax on the profit realized on the sale of a non-inventory asset that was purchased at a lower price.  If your capital gains are too high, possibly consider taking a loss to offset your capital gains income.
  3. Defer Your Personal Income: You might want to defer income until after the first of the year (January 2010), if you have reason to believe that next year you will earn a higher income, which may move you into a much higher tax bracket.  Think about this- If you are currently self-employed, send your last invoices out in late December (2009) so that you will more than likely receive payment in January. 
  4. Currently Self-Employed- Spend, Save and Stock Up: Now is a really good time of year to buy all of those business supplies and much need equipment that you have not purchased yet; the key here is to make sure that you save all of your receipts.
  5. Make a Charitable Contribution: Not only is it the season for giving, but it could also be your season to save, save, save, if you have extra cash.  Donate money to charity.  Make sure you get the proper forms and save your receipts in order to use the contribution as a deduction on your tax returns. 

These are just a few ways in which you can make appropriate changes to reduce your income tax burden in 2009.