Wednesday, December 28, 2011

Last minute tax-savings steps

Before you pop the bubbly to welcome in the New Year, Geithner and his gang of bandits have a few tips for you to consider doing over the next two days:

Make Charitable Contributions – If you itemize deductions, your donations must be made to qualified charities no later than Dec. 31 to be deductible for 2011.
Install Energy-Efficient Home Improvements – You still have time this year to make energy-saving and green-energy home improvements and qualify for either of two home energy credits.
Consider a Portfolio Adjustment – Check your investments for gains and losses and consider sales by Dec. 31. You may normally deduct capital losses up to the amount of capital gains, plus $3,000 from other income. If your net capital losses are more than $3,000, the excess can be carried forward and deducted in future years.
Contribute the Maximum to Retirement Accounts – Elective deferrals you make to employer-sponsored 401(k) plans or similar workplace retirement programs for 2011 must be made by Dec. 31. However, you have until April 17, 2012, to set up a new IRA or add money to an existing IRA and still have it count for 2011.
Make a Qualified Charitable Distribution – If you are age 70½ or over, the qualified charitable distribution (QCD) allows you to make a distribution paid directly from your individual retirement account to a qualified charity, and exclude the amount from gross income.
Don't Overlook the Small Business Health Care Tax Credit – If you are a small employer who pays at least half of your employee health insurance premiums, you may qualify for a tax credit of up to 35 percent of the premiums paid.

You can find the full detailed list with links to important publications here.

Best wishes,



  1. Last minute tax savings are all the rage right now. Certainly people want to decrease their tax liability in hopes of not owing much (or anything at all) to the tax man. What's even better is getting a surprise refund on taxes paid. I've gotten a refund for several years in the past, but since I'm self-employed now and the hubby is on W-2, I've avoided paying quarterly taxes. I doubt it very seriously if I get a refund this year.

    I also wrote a post on my blog related to this very topic that you may want to take a look at. I welcome and encourage your feedback.

  2. Elise,

    I'd like to see the blog post that you mentioned. Please send me a link.