Cook Wealth Management Group

Ten Year End Tax Tips

Tax TimeThe new year is quickly approaching! Here are a few ideas for potential last minute tax savings.

1. Contribute the maximum amounts allowable to your 401(k), SEP, or IRA accounts.

2. Review your investment portfolio for possible long term capital gains that may benefit from the special 0% rate if you’re in the 10% or 15% bracket.

3. Buy a new home between now and April 30th and you may be entitled to a First Time Home Buyers Credit of $8,000. Current homeowners who have been in their home for 5 of the last 8 years may be entitled to a $6,500 credit.

4. Pay state estimated taxes before 12/31 to increase your Schedule A deduction. (If you are subject to Alternative Minimum Tax, this will not benefit you.)

5. Review your investment portfolio for possible capital losses that can offset gains and up to $3,000 of other income.

6. Make contributions before 12/31 in cash or property to eligible charities and deduct the value on your Schedule A.

7. Make qualified energy-efficient improvements to your principal residence and possibly receive up to $1,500 in tax credits. Be sure to confirm the manufacturer has certified products that qualify for the credit.

8. Buy a new car for up to $49,500 and you may be eligible to deduct the sales tax paid on your 2009 tax return.  This deduction is available to married individuals with adjusted gross incomes under $250,000 and single filers with adjusted gross incomes under $125,000.

9. Consider contributing to your 529 education plans. Many states allow deductions on your return for these contributions.

10. Pay tuition in December for the upcoming spring semester if you qualify for the American Opportunity Credit.