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Tax Relief - Learn To Keep Money In Your Pocket

April 17, 2012 | Comments: 0 | Views: 128

Do you like money? Of course you do. Don't pay more taxes than you need to. Tax planning is a year-round process!

Most saving strategies cannot be implemented when you are preparing your last year's taxes. Tax decisions should be part of your overall financial plan based on your goals and objectives. Here are a few of the many ideas that might just put more money in your pocket!

1) Begin with keeping good tax records - Record tax-deductible expenses such as charitable deductions and if you volunteer to a qualified organization keep good records about your travel and other expenses. Adequate records for buying and selling your investments are critical. If you find it too difficult to establish and use separate filing folders (which is preferable) then create at least one main tax file where all your potential tax related expenses can be kept.

2) Use up your medical reimbursement plan and outline how to utilize it this year! Don't forfeit dollars with unspent money. Now is the time to schedule medical exams! So go get your new glasses and see your dentist!

3) Review your retirement plan contributions - Contribute as much as you can to your 401(k)! Every dollar contributed will save you income taxes. A great idea, if your employer also has a ROTH 401(k), is to split your contribution to get some tax-deduction now and non-taxed growth in assets with the ROTH later. This is the best of both worlds.

4) Take capital gains to offset capital losses- Rebalancing your portfolio back to your targeted asset allocation is usually a good idea. If you have capital gains and either current year capital losses or a carryover of losses in a non-retirement account plan to make adjustments before the close of the year as appropriate.

5) Increase charitable giving, reduce income - If you itemize your deductions don't postpone making charitable contributions either in cash or in non-cash items such as clothing, electronics, etc. Make charity a year-round event. Take pictures of donated clothing and household items valued at less than $500 because new IRS rules allow deductions only for items in "good" condition. Remember to get receipts for all donations of cash, clothing and household items as the IRS rules require documentation.

6) Donate stock - You can deduct the market value of the stock but avoid paying taxes on the appreciation in the stock price.

7) Donate land for conservation purposes - Most land donors can now deduct 50 percent of adjusted gross income, up from 30 percent, for donated conservation property.

8) Turn your home into income producing property by donating it to your favorite charity. If you own your home and want to increase income in retirement consider You can live your life out in your home and receive a stream of income. Talk to Salvation Army or your favorite charity to learn more.

Talk with your tax preparer or financial planner to develop some year-long strategies to save taxes. Take control, plan ahead, make smart choices!

Denise Wilcox is a CERTIFIED FINANCIAL PLANNER; and President of Wilcox Advisors, Inc., a registered investment advisory firm in Henderson, Nevada. She is a Contributing Writer for

The CFP® and CERTIFIED FINANCIAL PLANNER (tm) certification marks are financial planning credentials awarded by the Certified Financial Planner Board of Standards Inc. to individuals who meet education, examination, experience and ethics requirements.

Denise has also earned the Accredited Investment Fiduciary® professional designation, awarded by the Center for Fiduciary Studies, having received formal training in investment fiduciary responsibility.

Source: EzineArticles
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