Thursday, March 31, 2011

You can STILL cut your 2010 tax bill. Here's how.

With the federal income tax filing deadline approaching on April 18, there's still time to MINIMIZE your 2010 federal tax bill.
No. 1
You can still contribute to an IRA, Keogh or Employer Pension Plan and reduce your 2010 taxable gross income. This move gives you a two-for-one benefit: Cut your taxable income and save more for retirement. Deadline: April 18.
No. 2
Make the most of your tax credits on such expenses as child day care. Some taxpayers can deduct their children's college tuition costs.
No. 3.
If you were unemployed in 2010, you may be able to deduct job search-related expenses. (Just remember that your unemployment benefits ARE taxable).
No. 4.
If you started your own business or are self-employed in 2010, there are several tax breaks worth checking out. For example, your health insurance premiums or business start-up expenses.
No. 5
If you bought a hybrid car or an electric car such as the "Leaf" or the Chevy "Volt" you are eligible for a $7,500 federal tax credit.
No. 6
If you are a Washington resident, you can STILL deduct the estimated amount of state sales tax that you paid in 2010. The folks at to have a deduction formula based on your gross income. Definitely worth it.
No. 7.
Consider itemizing your deductions: home mortgage interest, charitable donations, self-employment expenses, small business expenses are all deductible. Losses on a stock sale are deductible.
For more ideas, the Wall Street Journal is out this week with 30 Last Minute Tax Tips.
Everybody says doing your own taxes is complicated but honestly it's like taking on a basic math problem. You just have to take your time and work through the math. Certainly, record-keeping is an important part of the process. There is tons of information online at to help you. There are plenty of reasons to meet the challenge. No one cares more about your money than you do, right?.
Doing your own taxes gives you a good sense of where you've been financially and where you're going. So start now on those taxes, don't wait!!

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