December 1, 2008 at 9:16 PM CST - Updated July 3 at 10:27 AM
The following information is from J. Derieck Hodges with Financial Planning Advisors, Inc. in Cape Girardeau.
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.
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.
To lower your taxable income in 2008, consider deferring bonuses and commissions to 2009.
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.
Contribute to a Health Savings Account (HSA). You have to be insured on a qualifying, high-deductible health insurance plan.
Consider equipment and vehicle purchases.
Payroll tax withholding and estimates
Avoid penalties by making sure you have paid enough tax in.
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.