Tax Refunds & Advice

Now that 2008 is pretty much gone you need to turn your sights to the new year. Are you ready for your taxes in 2009? Even though you need to finish things up from the past year you should also be looking forward. This is the only way to ensure that you get off to a good start when January 1 arrives.

What do you have to do in order to be ready for taxes in the new year? This depends on your current situation. For instance, if you work for a company you need to check with human resources to ensure that they are deducting the proper amount of taxes. If a change needs to be made early in the new year is the best time for it. On the other hand, if you work for yourself you need to make sure you are in position to continue to pay your quarterly taxes. Did you make any mistakes in this area last year? If so, you should avoid them in 2009.

Of course, you should never forget about the basics that can keep you on the ball throughout the year. This includes details such as staying organized, searching for deductions, and getting professional help when needed. You do not have to spend every moment thinking about your tax situation, but it is definitely important to be on your toes at all times.

Most people will find that their tax situation for 2009 is the same as last year. But before you join this group make sure you don’t need to make any changes. The more prepared you are the better off you will be as 2009 wears on.

In part one of the series we talked about four common ways to keep your income taxes as low as possible. They included paying extra on your mortgage, making charitable contributions, paying property taxes now, and paying medical bills. While these are four great tips, there are many others ways to lessen your tax liability.

1. Increase business expenses. If you own your own business, or are self-employed, look to increase your expenses before the year ends. You can do this by purchasing new supplies and equipment, paying bonuses to employees, etc.

2. Consider retirement savings. Money contributed to a retirement plan can help reduce your taxable income. This is a good idea, but make sure you do not go over your contribution limit for the year.

3. Lower your capital gains. To offset capital gains you can sell investments that are not performing up to par. Believe it or not, losses can offset gains at a ratio of $1 to $1. In turn, losses that exceed gains can be deducted.

Do any of these tips work for you? While all of them are something to think about, you may only be able to take advantage of one. Out of the three tips above most taxpayers find that they can use number two year in and year out. After all, everybody should be saving for retirement.

These three tips, along with the four from part one of the series, should allow you to save money this tax season. And who doesn’t want to do that?

Are you searching for ways to keep your income taxes down? If so, you are in position to do this but time is running out. Generally speaking, all of the best moves need to be completed by the end of 2008. Are you in position to take advantage of any of the following ways of lowering your tax liability?

1. Pay extra on your mortgage. Although you may be caught up on your mortgage making an extra payment is a good idea. The interest that you pay will be added to this year’s total which in turn increases your deduction.

2. Make a charitable contribution. December is the time for giving, and if you make a charitable contribution this can work out in your favor as well. While most people find it easiest to donate cash, do not forget that you can do the same with other items such as clothes and household goods. Make sure you receive a receipt for your charitable donations.

3. Pay property taxes now. Will your 2009 property taxes be due early in the year? If so, you may want to make a payment in December of this year. Remember, real estate taxes are deductible and for many people this makes all the difference in the world.

4. Pay medical bills. In many cases you may be able to deduct medical bills, as well as health insurance premiums and prescription drugs. You might as well make payments this year so you can use them to your advantage when filing your final income tax return.

These four year end tax tips should help you keep your income taxes low. The question is: do any of the above meet your situation?