End of Year Tax Tips

End of year tax tips to get working on now. April will be here before you know it a little prep during this time of year will make the tax season a little eaiser.

Topic Summary: Get Proactive Now To Make April 15th. A Little Less Taxing!

There are several steps you can take now to make sure you reduce your tax bite come April of next year. But you have to act now!

The easiest tax reducing measure that most homeowners who have a mortgage can implement is making a 13th mortgage payment right before the end of  the year. As  many homeowners use their mortgage interest paid as a income deduction, adding a 13th payment ( or even paying January's early) right before December 31st can save on average $125 in taxes. Before you set the budget for holiday spending, see if a last minute payment can be made.

If you normally get an end year bonus, ask your employer if they can defer it to 2012 so the added income will not be counted as income for THIS YEAR.

Have you maxed out your 401K contributions? Have you taken advantage of your Flexible Spending accounts, or Health Savings Account?

If you state allows 529 Tuition plans, check on the benefits of increasing contributions this year vs. next year.

If you have made any energy saving improvements to your home, get up to speed on the remaining tax credits that are available. A few energy-efficient home improvements made before Dec. 31, 2011, qualify for tax credits. Visit energy.gov for complete information.  Here is what the IRS will want to see.

Do a quick analysis of your total tax obligation by using an online service that is free. This way you can "play" with your own tax situation and model what it may look like come April 15, or when ever you file. By doing so the system will prompt you for tax deduction ideas you may not have thought of. One popular program is www.taxact.com

Here are some other tips from H&R Block

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