It's never to early to start thinking about year ending tax tips.
Before we know it, it will be too late to save ourselves thousands of dollars in taxes.
Below are five of my favorite tax saving and planning tips.
All easy to do on your own.
Enjoy! 5 Year End Tax Planning Tips
Before we know it, it will be too late to save ourselves thousands of dollars in taxes.
Below are five of my favorite tax saving and planning tips.
All easy to do on your own.
Enjoy! 5 Year End Tax Planning Tips
- Max out your contributions to a Roth IRA for 2009.
If you have already contributed $5,000, then start saving for next years contributions. - Did you know, you're allowed to contribute 100% of a paycheck to a 401K? As long as you don't go over the $16,500 limit, this strategy can defer taxation for decades.
Most employers have two paychecks remaining for 2009.
If possible, defer as much as you can from those two paychecks without going over $16,500.
- Beyond 2009 401K contributions, start thinking about increasing the percentage of your salary you contribute to a 401K.
Even a 1% increase, will make a huge difference years down the road.
- If you plan on making charitable gifts before the end of the year, only do so if you normally itemize your deductions.
Charitable deductions are only allowed for those who itemize.
If you don't think you will be itemizing this year, (hint: if you didn't itemize last year, and your situation didn't change much, then you probably won't be itemizing this year) wait until January 1st to make the charitable contributions.
- If you own stocks or mutual funds that have depreciated in value, think about using tax loss harvesting.
For an in depth explanation of what tax loss harvesting is, here is the best source I could find.
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