Year End Finance and Tax Tips

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in Taxes

Alright you’ve got two days left to wrap up your 2009 personal finances.  Here are some things you might want to take a look at before 2010 kicks off. 

  1. Make a Year End Donation.  I don’t like to give with the sole purpose of reducing your tax burden but this is one of the best tax breaks you can get.  You can help your favorite charitable organization and reduce your taxable income at the same time.  Your giving could be money or clothing and household items donated to GoodWill or another charitable organization.  Be sure to keep bank records of your donation if your organization doesn’t provide year end giving statements.  Those records can include canceled checks and bank statements.  Those records should show the name of the charity and the date.
  2. Spend Your Flexible Spending Account Money. If you’ve funded your flexible spending account this year whatever balances you have in there will disappear come new years day.   This might be a great time to get a new pair of glasses, order some new contacts, stock up on aspirin or go get Lasik.
  3. A Brand New Car! Okay I’m not advocating going to buy a new car just because, nor would I advocate going to buy a new car if you weren’t paying cash but you may be able to deduct state and local sales and excise taxes if you purchase a car, truck, motorcycle or RV.  If you’re looking for a motorcycle let me know I’m clearing mine out.
  4. Throw some Dough at your IRA – Roth or Traditional. Alright technically you have until April 15th 2010 to go ahead and fully fund your IRA but it’s good to be thinking about it now.  The limits are $5000 for those under 50 and those over can contribute up to $6000 in 2009.
  5. Make your Home More Energy Efficient. This includes putting in energy efficient windows, doors, skylights and some forms of insulation as well as roofs.  Further high efficiency heating and air conditioning systems, water heaters and biomass burning stoves are included in the Expanded Recovery Tax Act.  A biomass stove is a pellet or corn stove, I had to go look.  You can find more details on these credits at the IRS site but you can save up to $1500 on your 2009 Federal Income Tax Return for qualifying items.  This does not cover installation costs though so look out for that.

We’ll cover some things to think about as the new year kicks off here in the next couple of days until then Happy New Year!

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