Updated: 12/20/2011 10:24 AM ET|
Last-minute moves to cut your taxes
Pension or IRA contributions. These are especially important if you are self-employed. Unless you expect tax rates to shoot up, you want to pay your tax tomorrow rather than today.
Capital gains and losses. 2011 has been another wacky, volatile ride for investors, but the market is likely to show gains for this year. If you have capital gains, remember that any net capital losses over the $3,000 allowed on your 2010 tax return should be carried forward to offset those 2011 gains. If you still have net losses, up to $3,000 may be used to offset ordinary income for 2011.
All net long-term gains are subject to a maximum 15% rate. If you're in the 15% or lower tax bracket, your tax hit falls to zero.
If you're single with taxable income of $34,500 or less, you get the 0% rate. With a standard deduction of $5,800 and a $3,700 personal exemption, you can have as much as $44,000 in gross income and still qualify.
If you have net capital gains, sell losers to offset those gains. If you have more losers, sell at least enough to get the $3,000 offset against ordinary income. If you have shares of stock pregnant with gains and you don't expect them to appreciate further, sell those shares and shelter the gains with the losses on your losers. Worst case: Pay the maximum 15% tax. You can't go broke taking profits.
AMT: A headache you may face
I fully expect another year of last-minute relief on the alternative minimum tax. And if we don't get it, I encourage you to yell loudly at your representative and senators for not getting the job done.
More and more middle-income taxpayers are being hit with the AMT each year, which is basically a parallel tax system designed to ensure that everyone pays some tax. But it's forcing too many people to pay more tax than they should.
Each year, Congress has extended the AMT exemption. For 2010, it increased the exemption to $72,450 in taxable income for married couples filing jointly and $47,450 for single taxpayers. For 2011, these numbers were increased to $74,450 for joint returns and $48,450 for singles.
Last year you could make energy-efficient improvements to your home and qualify for a credit of 30% of the cost with a maximum of $1,500. Insulation, energy-efficient windows, and heating and air-conditioning systems all qualified. For 2011, the credit was cut to 10%, up to only $500 (reduced by any credit claimed since 2006), with a cap of $50 to $300 on fans, furnaces, water heaters, heat pumps and central air conditioning, and a $200 cap on windows.
VIDEO ON MSN MONEY
I find completely asinine that the Obama Administration took the 30% deduction for home energy improvements and just obliterated it to a measly 10%. With all of his bullsh*t talk about green power and renewable energy this is the time to help people not make it harder!!
We spend BILLIONS to bail out banks, car companies, etc but how about a BAILOUT for US the regular AMERICAN people? I was going to spend the money on a tank less water heater that would have cost me right around $1,200 but I would have been able to write off just over $350 of it, now it is not even worth the time for a measly $120.
Our PUPPETS in DC talk about energy independence but where is the help for us regular people? And they say rich people ($200K and up) should pay more in taxes. Well I don't know about you but most of my friends are lucky if they make $40K a year.
So much for being rich.............
Those who mentions "entitlement recipient", I just want to remind you that you will never receive all you have paid over 45-50 years for SS/Med care + employer input, since all middle income people have paid over a million, when adjusted for inflation, and for FED Rate interest charged banks, I am sure the Fed gov pay us with the same honesty they expected from us tax payers.
I have paid 1,260,000 Dollars, so it i time to start paying the stolen money!
But I know most of you are fooled by the US government to think, you get an entitlement!, like it is some kind of gift
End the Fed and its greedy evil intimidation
End the Tax on Unapportioned wages,
Call for a flat tax.
Ron Paul 2012
some good advice. not all the people need to itemize. if your totals in itemizing is higher than your standard deduction go for it. if it's below, you are better off with the standard deduction.
now if you run a business: itemizing is your best route to go and depreciating whatever you use for your business.
are you in school and paid full tuition? make sure you tell your tax pro about that. there are some credits that you can possibly qualify for
getting new appliances: make sure its a tax credit (not all appliances qualify). when it comes to windows, if you are replacing double sided window with new double sided windows, you don't qualify. its really good to know about your fed and state tax laws.
Can't we at least get through the year and have "a Happy New Year" without thinking about friggin taxes???? Or if this was a story to help people why publish on Dec. 30th......guess slow news day
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