Time Waits for No Tax Break: 9 to Take Now

10:56 pm Asset Protection, Estate Planning, Tax Planning

time running out e1323903320529 Time Waits for No Tax Break: 9 to Take NowBetween purchasing that perfect gift for a loved one and unpacking the holiday decorations, you should take a few minutes to ensure you’re taking advantage of every opportunity to lower your 2011 tax bill before the clock strikes midnight on December 31.  Here’s how:

Max out 401(k) contributions ($16,500 if you’re under 50, $22,000 if you’re over 50).

If you’re self-employed, invest in an individual 401(k) plan – you have until Dec. 31 to set one up and until April 15, 2012 to fund it.

Max out your health savings account contributions ($3,050 for an individual, $6,150 for a family; those over 55 can contribute $1,000 more if they are not yet enrolled in Medicare).

Make contributions to a 529 college plan to get a break on state taxes – that is, unless your plan is in California, which doesn’t currently offer any deductions for 529 contributions.

If your income dropped this year, do a Roth conversion.

Sell off the losers in your taxable investment accounts for a capital loss that can offset up to $3,000 of ordinary income on your tax return.

Make charitable donations with a credit card – you get the credit for the donation in 2011, but don’t have to pay until 2012.

If you’re over 70 ½, make a charitable contribution directly from your IRA.

Donate household items – you can take a deduction of up to $5,000 without a formal appraisal for the value of the donated items.

Help is available to you by contacting your Southern California financial planning experts today.

 

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