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Make Money-Saving Tax Moves Now

By
Laura Adams, MBA,
August 12, 2010

 

Quick Tip:  Make Money-Saving Tax Moves Now

It’s a great time to start thinking about your 2010 taxes because there’s plenty of time before the end of the year to make some money-saving moves! Here are five tips to help you reduce your taxes:

  1. Accelerate your income. If you’re a high earner, you’ll be subject to higher tax rates starting next year. Income (such as bonuses and commissions) that you can claim and pay taxes on in 2010 will save you money. 

  2. Take investment profits. The capital gains rate will be higher starting next year. So if you plan to take any profits on long-term investments, such as stocks or ETFs, you can take advantage of 2010’s lower tax rate.

  3. Make energy-efficient improvements to your home. If you need new windows, doors, or air conditioning, for instance, install them before the end of the year so you can get an energy tax credit of up to $1,500 when you file your return.

  4. Increase your retirement savings. You can generally postpone paying taxes on money you contribute to a traditional retirement account, such as a 401(k) or IRA.

  5. Check your withholding. If you received a large refund in April, you may need to reduce the amount of tax withheld from your paycheck, which will give you an instant pay raise.

Image courtesy of Shutterstock

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