Last-minute tax tips
Last-minute tax tips from Cook CPA Group. Roseville tax preparation experts from Cook CPA Group offer some proactive tips for getting ready for the upcoming tax season.
While we still do not know the year-end tax changes, here are some smart tax moves you can make in December.
No matter how crowded your calendar is this month, be sure to make time to consider some tax-saving possibilities.
- Check your 2010 tax payments, and if you haven’t met the minimum requirement, increase your withholding before year-end to eliminate or reduce underpayment penalties.
- Consider converting your traditional IRA to a Roth before year-end. You can elect to pay the tax over two years’ tax returns, 2011 and 2012, or pay in full on your 2010 return.
- Buy needed equipment for your business before year-end to utilize the first-year expensing option of up to $500,000. Bonus depreciation of 50% of the cost of equipment is also available for 2010 purchases.
- Expensing applies to both new and used items; bonus depreciation can only be taken on new equipment.
- Use your credit card to pay tax-deductible expenses by December 31 if you’re short of cash. You can deduct the expenses on your 2010 tax return even though you pay the credit card bill in 2011.
- Review your investment portfolio to decide whether you should sell some losers to offset gains already taken or vice versa. Any excess loss can offset up to $3,000 of ordinary income.
- Make energy-saving improvements to your home that will qualify you for a tax credit of up to $1,500.
Contact us for details on any of these suggestions or to discuss the tax-cutting options best suited to your situation.