Contributions Directly Reduce Your Taxes
401(K) $15,500 + $5,000 (catch up) = $20,500
SIMPLE IRA $10,500 + $2,500 (catch up) = $13,000
2. Be Generous - Make a Charitable Donation
Get Out Those Old Clothes and Donate Them
All Contributions Require Receipts
· Donated items, such as cars, clothing, and household goods.
Must be in "good used condition."
3. Win With Losers - Review Portfolios
· Many funds will have Capital Gain Distributions - sell losers to offset gains
· Review and rebalance portfolio before year-end to offset any long-term gains by selling long-term losers
· You can deduct up to $3,000 per year against ordinary income
· You can also carry forward balance to future years
4. College Savings Plan Contributions by Dec. 31st
· State Tax-Deduction with NYS & CT Plans (Residents Only)
$5,000 state tax deduction per person
$10,000 (Married couples filing jointly)
(New Jersey Residents ~ No State Deduction)
5. Go Green-But Don't Rush
Tax Incentives for Energy Efficiency:
· Go Solar ~ 30% Credit Up to $2,000 in 2008
In 2009 - No Cap on Credit
(30% Credit of Systems Entire Cost)
· Allows you to claim the cost of installing solar water heating, or fuel-cell equipment in your home.
· Make Your Home Energy-Efficient ~ 10% Credit Up to $500
**Expired in 2008 - Reinstated for 2009**
· Energy Tax credit of up to $500 for making qualifying energy-saving improvements to your home. (Insulation, Windows, Doors, etc.)
6. Trim Taxes with Flexible Spending Accounts
Use It or Lose It
· Pharmacy can print a list of "over the counter" drugs you've purchased.
· Pre-tax programs to pay for unreimbursed health care, child care or elder care expenses (eyeglasses, contact lenses, braces, etc.).
· Use It or Lose It Rule Relaxed ~ Claims Deadline Extended - 2 ½ months after plan year to March 15, 2008