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!

{ 5 comments… read them below or add one }

Financial Samurai 2009/12/29 at 11:59 pm

Do you know if installing Energy Efficient Green double paned windows counts as getting money from the gov’t?
.-= Financial Samurai´s last blog ..The Katana: Lauching The Samurai Fund To Prove A Theory 12/28 =-.

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paul 2009/12/30 at 10:30 am

I’m not sure what you’re getting at here. This is part of the energy efficient program and results in a tax break. Technically speaking you are able to keep more of your own money in the form of tax breaks.

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Bob Horn 2009/12/30 at 10:41 am

Good thoughts, Paul. Additionally, I would add that the best way to finish the year is to make a plan for the year ahead that distributes your charitable giving and investing over all 12 months!
.-= Bob Horn´s last blog ..The Ride for Impact Recap =-.

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paul 2009/12/30 at 11:04 am

You are absolutely correct Bob, great tip.

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Cars4Charities 2010/01/01 at 8:08 am

You will receive a tax deduction of at least $500 if you donate a car to charity. You can donate your car even if it no longer runs and you can pick from hundreds of respected charities to donate car to at Cars4Charities.

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