Year-end tax tips

December 14, 2008 8:14:36 AM PST
With just two weeks left in the year, there still may be time for you to save on your 2008 taxes. President of the AJK Financial Group, Alan Kahn, joined us with some last-minute tax tips. 1. Max Out Retirement Savings-Only 2 Weeks Left
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

Click here for more New York and Tri-State News

Report a typo || More weekend stories || Send news photos/videos