Wednesday, December 28, 2011

Saving Money- Taking Advantage of Tax Savings

It is the end of the year.. well almost with 3 days left in 2011 I wanted to share a couple of things that you can do to decrease your tax liability.
This is the one that we are taking advantage of, a tax credit for the year when you purchase energy saving items for your home. Check out the list here Energy savers. We have already purchased 4 windows and plan to purchase the additional ones we need to finish the house on Saturday. According to everything I am reading we will get a credit of 10% of the purchase price. We should be closed to the $200. This credit is non-refundable but will be taken off our tax liability.
Next is a simple one- make a donation of money to a charity. We have been doing so all year. I heard a statistic that 40% of all charitable contributions are made in December.
Third- This is another simple thing, donate clothing,toys or household goods that you don't need or have replaced.  If you chose to donate make a list, by doing so you can claim the most value for your items. I have a box of clothing that is marked yard sale, instead I may go ahead and make the donation to simply empty out the close.
Fourth- If you have any outstanding medical bill, the more you pay in one year the more chance you could use this on your taxes. My understanding is that you can only count medical expense you pay out that are more than 17% of your income.
Finally- Make an extra mortgage payment this month or simply pay your January payment in December. This will increase the amount of interest you pay out for the year.

Do you have any other tips?

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