Tips for Lowering Taxes
Four Key Strategies to Lower Personal Taxes
Each year, our firm provides a great tax resource in the tax planning guide. The 2011-12 Tax Planning Guides have arrived. We know thinking about taxes is never fun, but it’s something you can’t afford to put off. This is especially true as the filing deadline nears and time to implement last-minute tax strategies grows short.
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 extended some expiring tax breaks and expanded others. Perhaps most notably, it extended the lower income and capital gains tax rates. So, you’ll owe less tax this year than if the law hadn’t been passed.
Consider the following steps to reduce your 2011 taxes like:
- Contributing the full amount allowed to your IRA, defined contribution plan or SEP.
- Taking all deductions, exemptions and credits you can. Deductions can include property taxes, mortgage interest, home office, sales taxes, tuition and fees, and student loan interest. Credits range from child and adoption to energy savings.
- Checking to see if you would be better off filing jointly or separately if you are married.
- Determining if you’ll have to pay the alternative minimum tax (AMT). More and more taxpayers are becoming subject to this tax, and you don’t want to be surprised by it. Calculating the AMT can be complicated, so you’ll find it helpful to consult a tax professional for help in running the numbers and figuring out what you can do to minimize any AMT liability.
Also remember, last year the biggest tax planning concern related to your investments was likely the return of higher long-term capital gains and dividend rates schedules for 2011. Fortunately, Congress extended the 15% rate in December – but only through 2012. You may want to consider taking steps this year and next to lock in lower rates.
The tax guide describes steps you can take now and in the future to lighten your tax burden. Click here to view the 2011-12 Tax Planning Guide. Looking for ways to lower your personal tax burden or assistance with your personal tax strategies? Call us at 850-435-7400 or click here.