The end of the year is quickly approaching but there is still time to take action to save on your tax return. Here are 3 ideas to lower your tax bill:
1. Non-cash contributions: Clean out your closets and donate those items you don't use or need anymore. If you itemize your deductions you can take a charitable donation for the thrift shop value of any goods that are in a good or better condition. I recommend keeping a listing of what you gave because it may be worth more than you think. If the total thrift shop value is in excess of $500, there is an additional form (Form 8283) to include in your tax return which asks for the date of each contribution, the name and address of the recipient organization and the value of the donation.
2. Capital losses: If you have losses in your non-retirement investment accounts that you don't think will recover any time soon, you might want to sell some of them and recognize the loss before year end as you can take up to $3,000 of losses in excess of your gains against your other income such as wages.
3. Make your 4th quarter state estimated payment by December 31st: 4th quarter estimates aren't due until January 31st. However, if you itemize, state taxes are a deduction so payments made by year end will count as a deduction in the current year instead of having to wait until next year to see the benefit from them. Your payment is considered made on the date it is postmarked so if you are sending one in close to year-end consider sending it via certified mail so you have proof of the date sent.
A final suggestion is to spend a little time organizing your financial records so you don't accidentally miss an opportunity to save.
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