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A Different Sort of Tax Holiday

Six tips to lower your tax bill during the holiday season

December’s no time to forget about taxes! Follow these tips to maximize your tax savings while you celebrate.

  • Plan tax deductible travel

Dreading that expensive trip to Grandma’s? Schedule a meeting with a client or vendor on the way and the travel there and back is tax deductible. Family visits are so much better when part of the trip’s on the IRS.

  • Treat yourself (to a tax deductible gift)

The holidays aren’t just a great time to give to others, they’re also a great time to buy yourself that something you’ve been craving all year. And if that present is tax deductible, you save money on your taxes too!

Most tempting are tech toys such as iPads and smartphones. You can deduct electronic purchases if you are self-employed, have a hobby that generates income, or work for an employer that won’t cover business expenses.

The IRS is pretty strict with equipment purchases, so it’s important you be able to demonstrate that you use the equipment at least 50% of the time for business, and that it’s a usual and necessary expense, given your line of work.

Note that if you are an employee of a business that doesn’t cover equipment purchases, you can only deduct expenses that exceed 2% of your household’s AGI. Continue reading “A Different Sort of Tax Holiday”

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A Number of Income Tax Deductions and Credits Set to Expire

You can save money on your 2011 taxes with these soon-to-be-extinct tax breaks!

Think it’s too late to save on your 2011 taxes? Think again! Here are six deductions and tax credits that will be gone by the end of the year:

  • Energy Efficiency Tax Credit

Making energy-efficient upgrades to your home isn’t just a great way to cut down on heating and cooling costs, it can get you a tax credit too.

If you add more insulation to your attic or buy an energy-efficient appliance, among other possible improvements, you can apply for a tax credit. For a full list of qualifying improvements, refer to the Energy Star website.

The tax credit is worth 10% of the cost of these improvements.

But note that there is a $500 lifetime limit on this credit, so if you’ve taken advantage in previous years, you may not be able to do so again.

Congress has made some changes to the rules governing these credits for 2011. Go here for a full summary of the changes. Continue reading “A Number of Income Tax Deductions and Credits Set to Expire”

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Volunteer to Give Federal Income Tax Return Help to Disadvantaged Taxpayers

You can help low-income people in your local community get their full refund when they file taxes for 2011. Find out how!

As the season to file 2011 taxes inches ever closer, most people are preoccupied with getting their own financial house in order. But even in the tax world, Thanksgiving can be a great time of year to give back.

For instance, did you know that although it is often portrayed as the big bad wolf of personal finance the IRS in fact gets millions of disadvantaged people free income tax help every year through its Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs?

IRS volunteers assist low-to-moderate income taxpayers, senior citizens, people with disabilities, and non-English speakers who all make less than $50,000 and often suffer significant financial hardship.

As the vast majority of these disadvantaged citizens are due a refund, helping them file can get them money that could have a significant positive impact on their lives. In short, it’s a worthy cause. Continue reading “Volunteer to Give Federal Income Tax Return Help to Disadvantaged Taxpayers”