The holidays are an expensive blur. Between meals, gifts, parties, travel and even gift exchanges things can get pretty stressful. Throw tax planning into the mix, and you have reached a whole new level of meltdown. With less than two months until 2014, it is time to start making the most of your deductions to better shrink your tax bills. Prior planning is the best way to enjoy the holidays and kick off the New Year. Here are seven ideas to get you headed in the right direction . . .
1. Deposit Money into Retirement Savings. Contributing more money to your 401(k) not only increases your retirement savings, it lowers your taxable income and shrinks your tax bill. If you choose to sacrifice upfront tax breaks on your Roth IRA, you will enjoy tax-free IRA withdrawals later in life.
2. Start Giving. The holidays are a great time of year for charitable donations. Not only will you feel good about helping those in need, you will receive tax deductions as well. Be sure to get signed and itemized paperwork for your records, and remember that not all donations are tax-deductible.
3. Get your ducks in a row. Making sure your deductions are in order will save you time when you pay your taxes. Also, don’t forget to compile your receipts. You can deduct professional fees relating to tax advice, personal business expenses, and employee expenses that were never reimbursed.
4. You may be eligible for tax relief. If you are a victim of the severe storms, flooding, landslides and mudslides that began on September 11 in Colorado you may qualify for IRS tax relief.
5. New family members may save you money. Dependency exemptions on your taxes may reduce your taxable income by thousands of dollars. If you had a baby or adopted a child this year, make sure you have talked to your employer about this new withholding allowance.
6. Seek a professional. Taxes can be complicated. Especially when you end up owing the State or IRS a significant amount. If you are feeling lost seek the advice of a tax relief attorney.
7. Go Green to Get the Green. If you have upgraded to an energy-efficient appliance you may be eligible for a $500 dollar tax credit. This credit was extended through 2013, so if you have an energy-efficient water heater, boiler, AC unit, fans, or furnaces it is time to cash in on this credit if you have not done so already.
Even though you may not look forward to doing your taxes each year, use these tips and help from a tax professional to stress less. Staying informed and organized will help you save money and receive maximum tax deductions.
If your deductions aren’t enough and you now owe over $10,000 to the IRS or State, be sure to contact US Tax Shield. One of our Tax Relief Attorneys can start negotiating your tax debt today. Right now, we offering a FREE 15-minute, no obligation, confidential tax case analysis with one of our Senior Tax Professionals: Call 877-829-3535 now.