Tuesday, 27 December 2011 09:54 Last Updated on Tuesday, 27 December 2011 09:58
Merry Christmas! While enjoying the holiday and looking forward to a week of good cheer, take some time to give yourself the gift of good planning and take advantage of some last minute, end of year tips.
Gather up all the extra tax deductions and credits you can find.
Note that these benefits are not applicable to everyone. Check with your tax professional before making changes.
1. While your kids are hanging around the house this week — bored, no doubt — enlist them to bag up their old clothes and toys and donate them to a local charity, like the Bushkill Outreach (www.bushkilloutreach.org). Be sure to make an inventory list of what you are donating and have it signed or stamped by the organization. Yes, I know it's a pain to go inside and get the receipt, but it's worth the hassle so you can take the deduction. To make it easier, the Salvation Army will pick up your donations. You can call 1-800-SA-TRUCK or even go online in some areas (but not the Poconos) to schedule a pick up.
2. If you plan to make energy efficient improvements such as new exterior doors, windows, or insulation, get it done this week; the tax credit for these items expires Dec. 31. You may be eligible to receive a 10 percent credit, up to $500 (subject to a lifetime limit of $500). Remember a credit off sets your taxes dollar for dollar while a deduction reduces the amount of income subject to tax, and if you owe no tax, the credit will not help.
3. While Pennsylvania allows a deduction for unreimbursed employee expenses from dollar one, federally those deductions plus assorted others are lumped together under "miscellaneous itemized deductions" and only the part that exceeds 2 percent of your adjusted gross income is deductible. If you are close, it pays to group those expenses into one year where possible, to make the most of the deduction.
