Chasey_Lane
Salt Life
A few tips you can do now to pay less taxes in 2007. (Taken from TaxAct)
Use up your Flexible Spending Account (FSA): If you still have money left in your FSA, don't let it go to waste. Stock up on qualified over-the-counter medications, get new glasses or contacts, or see your dentist. You can also pre-pay for elective surgery now, even if the surgery isn't scheduled until next year.
Make charitable contributions: Donating cash, clothing, and household goods by Dec. 31, 2006 will allow you to deduct the fair market value of those donations on your 2006 taxes. Also, as of August 2006, items you donate must be in good used condition or better. And, be sure to get a receipt!
Be energy efficient: You may be able to claim a new tax credit for the purchase of qualified energy efficiency improvements to your existing home. There's also a credit for the purchase of a residential solar water heating, photovoltaic equipment, or fuel cell property. Also, the purchase of a qualifying alternative-fuel vehicle could give you a tax credit of up to $3,400.
Max out contributions to your retirement plan: In 2006, the IRS allows you to contribute up to $15,000 in a 401(k) plan if you are under 50 (up to $20,000 if you are over 50). The deadline is December 31, 2006
Accelerate payments that can provide tax deductions: You can claim the interest or real estate tax deduction in 2006 if you pre-pay your January 2007 mortgage or property tax bill by Dec. 31, 2006.
Be aware of the new "kiddie tax" rules: The election to report a child's investment income on a parent's return and the special rule for when a child must file form 6251 now apply to children under 18 (previously the age limit was 14).
Postpone income: If you can defer your income from 2006 into 2007, the income won't apply to your 2006 taxes. But note, simply waiting to cash a check you received in 2006 until next year does not defer the income. If it was received in 2006, it is income in 2006.
Offset capital gains: If you have any investments that have generated deductible losses, you can use the losses to offset any gains. You can use $3,000 of net capital losses in excess of capital gains to offset ordinary income.
Plan for the alternative minimum tax (AMT): Review your AMT situation to see if you'll likely be subject. You will then know if you should accelerate your deductions or defer them. Reducing your AGI will help, but reducing your itemized deductions is most beneficial.
Use up your Flexible Spending Account (FSA): If you still have money left in your FSA, don't let it go to waste. Stock up on qualified over-the-counter medications, get new glasses or contacts, or see your dentist. You can also pre-pay for elective surgery now, even if the surgery isn't scheduled until next year.
Make charitable contributions: Donating cash, clothing, and household goods by Dec. 31, 2006 will allow you to deduct the fair market value of those donations on your 2006 taxes. Also, as of August 2006, items you donate must be in good used condition or better. And, be sure to get a receipt!
Be energy efficient: You may be able to claim a new tax credit for the purchase of qualified energy efficiency improvements to your existing home. There's also a credit for the purchase of a residential solar water heating, photovoltaic equipment, or fuel cell property. Also, the purchase of a qualifying alternative-fuel vehicle could give you a tax credit of up to $3,400.
Max out contributions to your retirement plan: In 2006, the IRS allows you to contribute up to $15,000 in a 401(k) plan if you are under 50 (up to $20,000 if you are over 50). The deadline is December 31, 2006
Accelerate payments that can provide tax deductions: You can claim the interest or real estate tax deduction in 2006 if you pre-pay your January 2007 mortgage or property tax bill by Dec. 31, 2006.
Be aware of the new "kiddie tax" rules: The election to report a child's investment income on a parent's return and the special rule for when a child must file form 6251 now apply to children under 18 (previously the age limit was 14).
Postpone income: If you can defer your income from 2006 into 2007, the income won't apply to your 2006 taxes. But note, simply waiting to cash a check you received in 2006 until next year does not defer the income. If it was received in 2006, it is income in 2006.
Offset capital gains: If you have any investments that have generated deductible losses, you can use the losses to offset any gains. You can use $3,000 of net capital losses in excess of capital gains to offset ordinary income.
Plan for the alternative minimum tax (AMT): Review your AMT situation to see if you'll likely be subject. You will then know if you should accelerate your deductions or defer them. Reducing your AGI will help, but reducing your itemized deductions is most beneficial.
