Tax preparation for individuals and small businesses in the Twin Cities
1. Maximize your 401k contributions
Increasing contributions to an employer-sponsored retirement plan will not only give taxpayers a boost for the future, it can save taxes by lowering their taxable income.
Lowering taxable income could also help taxpayers take some other deductions based on their taxable income.
2. Sell losing investments
Selling a few loser stocks for a net capital loss is a good way to get a $3,000 (or $1500 for single
filers) offset against other sources of gain or income. A benefit from all the capital (stock) losses investors have suffered recently, is that they can
carry unused capital losses forward for as long as they live. This means you can recoup some of those losses against future capital gains and tax returns.
3. Donate to charity
Donating clothes, toys, household goods and other items to charity before Dec. 31 may help taxpayers who itemize claim bigger refunds while helping someone else.
4. Prepay some bills
Taxpayers can prepay a few of their bills due next year in the current year, and get to write them off on this year's tax return. This includes mortgage
payments and predictable medical expenses, like braces for the kids.
5. Deduct job search expenses
Taxpayers who are unemployed or just conducting a job search for new employment can deduct their job search expenses from their taxes. The rules, however, require
that their job search be in the same line of work they are currently in. Job search expenses can include travel, lodging, phone calls, resume preparation,
and career counseling. These can be deducted even if they don't get a job offer. However, if this is a first job, no job search expenses are deductible.
6. Tax relief for foreclosures
Recent legislation provides tax relief to people with a home loan that was reduced, restructured or foreclosed. Taxpayers that qualify may not have to pay
taxes on the amount of debt that was forgiven by their bank.
7. Open or contribute to an IRA
Qualifying taxpayers have until April 15th to open or make contributions to an IRA or retirement account. Making a deductible contribution before
the due date may help lower your tax bill.