Last week the RDTC Tax Help Blog posted a helpful article for anyone looking to lower their taxable income before the end of the year. In addition to the standard end of the year tax tips, the blog even provides links to charities that accept donations online, and banks that will allow you to setup college saving funds online. I have included a few tips below, but be sure to check out the full article here.
Electronic Mortgage Payments
If you can make your mortgage payment online, then you might want to make an extra mortgage payment before the end of the year. Since the IRS allows you to deduct all mortgage interest, this could significantly lower your taxable income for the year. However, if you make the payment close to the end of the year then you will want to be sure and double check the 1098 Form you receive from your lender to ensure it includes the last minute payment.
Make State and Local Tax Payments
The IRS allows you to deduct all taxes paid to state and local governments. If you know that you are going to owe, then you might want to consider making an estimated payment before the end of the year. Check out your local tax agency’s website to see if they accept payments online, or they might have a phone number that you can call to make a payment with your credit card.
Order Energy Efficient Home Upgrades
The IRS offers a credit of 30% of the cost of qualified energy efficient home upgrades, up to $1,500. Although the credit applies to upgrades such as roofs and insulation, certain water heaters, windows, doors, and air conditioning units qualify as well. If you are in need of any of the aforementioned products then you could make your purchase from Lowes.com or HomeDepot.com in a matter of minutes. However, before you pull out your credit card be sure to check out this page on EnergyStar.gov explaining the Federal tax credit.
Splurge on Office Supplies and Furniture
If you are a small business owner and have an office or store for your business, then you can greatly reduce your taxable income within a few minutes by splurging on new office supplies and furniture. There are lots of great office furniture websites, and some that will even deliver and setup the furniture for you. In just a few minutes, you could easily reduce your tax liability by thousands of dollars.