Tips by Manhattan CPA to Save Tax
By: Jonathan Medows, CPA | Posted: 02nd December 2009
Tax filing and preparation is not an easy business, but it needs profession services of a tax accountant or a CPA. From financial planning to money management tips and money issues, it is essential to plan your income tax filing in advance. So the end of the financial year is close and this may be the last attempt to utilize all available benefits to save tax. Some of the best tips to save tax include:
Funding Charities
With Christmas around the corner, open up your purse strings and donate. This is the last time within this year that you can give for charity and get the tax benefit for this year. You may have already contributed to other charities through the year, so it may be a wise decision to go over and check your account books or donation receipts and see if your donations have reduced the tax liability or do you need to make a few more.
Capital Gains
If you have had a good capital gains income, it is best to save tax by selling off your bad investments or loss making stock options. Thus, you are eligible to claiming capital loss and can save a part of the tax on your income. While some of the losses can be offset against some of the capital gains. Though there is a $3000 limit but you can carry it forward for the next year's tax accounting.
Get the Upgrades
Have you been thinking about energy upgrades in your home? Green energy upgrades not only help you aid conservation of environment but energy efficient upgrades are eligible for tax deductions. So, it is a good idea to do it within this financial year as 2009 has higher deductibles and more credits available for better energy upgrades.
Setup 529 plan
The 529 Plan come with added values of large tax benefits. So if you have kids, you can consider putting in the maximum contribution and enjoy some tax savings. The extra funds can go in to pay for future college funds.
Early Payments on Taxes and Mortgages
The best method to lower your taxable income and get better deductions is to pay off your mortgage and property taxes early. However, it may add up to a higher tax bill for the next financial year but for now it will be one less bill payment and tax saving.
Enhance 401(k) payments
Contribute the maximum you can to 401(k) or other tax saving plans so that you get maximum tax exemption before the financial year ends. Not only will it be tax saver but help you add up on retirement funds.
With the year end round the corner, it is best to plan your taxation for this year end and the new financial year beginning. By calculating the total income for this year and getting an estimate on your remaining taxable income, you can calculate the due tax and investment measures that can help you save tax. Having a CPA or a tax advisor can help you save thousands of dollars that you can invest in your own business for added profits.
Jonathan Medows, CPA, MBA is the Managing Member of MEDOWS CPA, PLLC, a boutique New York CPA firm serving the needs of individuals, freelancers, self employed individuals & small businesses. To see how he can help you reduce your tax liability and keep you in tax compliance please visit his website:
Medowscpa.comAbout the Author
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Tags: wise decision, stock options, money issues, tax deductions, capital gains, easy business, purse strings, tax accountant, deductibles, tax benefit, green energy