End of Year Tax Tips - KFVS12 News & Weather Cape Girardeau, Carbondale, Poplar Bluff

End of Year Tax Tips

The following information is from J. Derieck Hodges with Financial Planning Advisors, Inc. in Cape Girardeau.

  • Retirement Savings
    •  To lower your taxable income in 2008, consider making a larger contribution to your 401(k)  or contribute to an Individual Retirement Account (IRA).
    • Consider converting Traditional IRAs to Roth IRAs.   This will increase your taxable income for 2008 but can provide substantial tax benefits long term. 
  • Investment
    • Capital loss sales - if you have investment gains from earlier in the year you can sell something at a loss and offset the gain.  You can also apply up to $3,000 of a capital loss to ordinary income.  Any excess losses can be carried over to future years.
  • Earnings
    •  To lower your taxable income in 2008, consider deferring bonuses and commissions to 2009.  
  • Itemized Deductions
    • Charitable Giving - Consider all of the charities you care about and make contributions before the end of the year.  
    •  Prepay your January 2009 mortgage payment to get a higher mortgage interest deduction.
    • Be careful if you are getting close to the itemized deduction phase-out.  Delay deductions if you are at the phase-out limit of $159,950 for individuals and $239,950 for couples filing jointly.  
  • Medical
    • Contribute to a Health Savings Account (HSA).   You have to be insured on a qualifying, high-deductible health insurance plan. 
  • Business Owners
    • Consider equipment and vehicle purchases.
  • Payroll tax withholding and estimates
    • Avoid penalties by making sure you have paid enough tax in. 
  • Organize
    • Have your receipts organized.
    • Talk to a tax advisor.
    • Review your prior year tax return and anticipate what documents will be coming in after January 1st.
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