The IRS wants to remind all taxpayers that with the New Year fast approaching, there is still time for you to take steps that can lower your 2012 taxes. However, you usually need to take action no later than Dec. 31 in order to claim certain tax benefits.
Tax Planning – Below are three tax saving tips for you to consider before the calendar turns to 2013:
- Make Charitable Contributions – If you itemize deductions, your donations must be made to qualified charities no later than Dec. 31 to be deductible for 2012. You must have a canceled check, a bank statement, credit card statement or a written statement from the charity, showing the name of the charity and the date and amount of the contribution for all cash donations. Donations charged to a credit card by Dec. 31 are deductible for 2012, even if the bill isn’t paid until 2013. If you donate clothing or household items, they must be in good used condition or better to be deductible.
- 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 2012 must be made by Dec. 31. However, you have until April 17, 2013, to set up a new IRA or add money to an existing IRA and still have it count for 2012. You normally can contribute up to $5,000 to a traditional or Roth IRA, and up to $6,000 if age 50 or over.
And here is one final tip to help prevent with tax problems: you should always save receipts and records related to your taxes. Good recordkeeping is a must because you need records to prepare your tax return, and it will help you to file quickly and accurately next year. Don’t hesitate to contact us at 407-344-1012 if you have any questions regarding your taxes. God Bless