Newsletter
2011 Tax Strategies
There's not much time left to lower your 2011 tax bill. Some actions you might consider before year-end:
* Prepay college tuition you'll owe for the first semester of 2012. This year you can deduct up to $4,000 for higher education expenses. Income limits apply.
* Max out your retirement plan contributions. You can set aside $5,000 in an IRA ($6,000 if you're 50 or older), $11,500 in a SIMPLE ($14,000 if you're 50 or older), or $16,500 in a 401(k) plan ($22,000 if you're 50 or older).
* Planning to buy a new car? Buy before year-end if you're going to choose to deduct sales taxes instead of local and state income taxes.
* Install energy-saving improvements in your home (such as insulation, doors, and windows), and you might qualify for a tax credit of up to $500.
* Estimate your tax liability for 2011. If necessary, adjust your final quarterly voucher or your withholding to avoid underpayment penalties.
* Establish a pension plan for your small business. You may qualify for a tax credit of up to $500 in each of the plan's first three years.
* Buy equipment needed in your business to qualify for 100% bonus depreciation or up to $500,000 of first-year expensing.