Ways To Maximize Your Next Tax Return
PITTSBURGH (KDKA) – The last thing many people want to be thinking about during the holidays is their taxes.
However, there are some very important things you can do between now and the end of the year to save money on your next tax return.
It’s Christmas time, but the size of your Christmas gift from the IRS may depend on what you do between now and the end of the year.
Tax accountants may take a break on Christmas, but year-end is a busy time of year for many like CPA Dan Phillips with Schneider Downs, who said this is the time to reduce your 2010 taxes and increase that IRS refund.
For example, if you have a mortgage payment in January, pay it this month.
“You want to make that payment before the year ends. The interest you make on that piece of the payment will be deductible on your Schedule A in 2010,” Phillips said.
If you’re thinking of making a donation to your favorite charity, do it this week to deduct it on this year’s tax return.
“Especially if you have contributions earmarked for early next year, you want to accelerate those into December,” Phillips said.
If you have some old clothes, computers or other items, this is a good week to give them to charity.
“That’s a good thing at year-end to clean out the closets and things like that. If there are things sitting around the house that have value that you’re not using, now’s a good time to donate those. Make sure you get a receipt for what you’ve contributed,” Phillips said.
Another tip, pay some local property or state taxes this year.
“If you can get the payments made by year-end, those will be deductible for you in 2010 rather than 2011,” Phillips said.
And if you’re lucky enough to get a year-end bonus, ask your employer to put it off until January.
“If you can push the bonus back until 2011, you won’t pay any taxes until then. In 2010, you might want to make sure your maximizing on your 401K deductions and things like that,” Phillips said.
Keep in mind that you only have from now until the end of the year to do all those things that will maximize the biggest Christmas gift from Uncle Sam.