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Last-minute tax-deduction tips from the pros

IRS offers advice to help reduce the tax pinch in April

Posted: December 29, 2012 3:24 p.m.
Updated: December 29, 2012 3:23 p.m.
 

The new year may be just days away, but the Internal Revenue Service says that’s plenty of time to make last-minute year-end deductions and changes to help when April rolls around.

Here are a few ways to save before the holiday season turns into tax season:

• You still have time to donate household goods or clothing for a charitable deduction. The IRS says regardless of the contribution value, you must get a receipt with the name of the charity, date of the contribution, and description of the donated property.

If a donation is left at a charity’s unattended drop site, keep a written record of the donation that includes this information.

Check irs.gov to see if the organization is qualified in its Exempt Organization Select Check database. Churches, synagogues, temples, mosques and government agencies are eligible to receive deductible donations, even if they are not listed in the database.

• Consider putting your holiday bonus or extra money into your retirement fund, whether an employer 401(k) or a personal IRA.

You can make 2012 IRA contributions until April 15, 2013, so review IRA contribution and limits to make sure you’re putting away the maximum amount of money you can.

• Spend some time today and tomorrow to adjust your portfolio by the end of Dec. 31. The IRS says you may normally deduct capital losses up to the amount of capital gains, plus $3,000 from other income.

If your net capital losses are more than $3,000, the IRS says the excess can be carried forward and deducted in future years.

• Consider a last-minute purchase of an energy-efficient appliance. Qualifying dishwaters, clothes washers and refrigerators can be claimed as a credit on your taxes.

Check irs.gov for the credits and qualifications for such appliances. Many department stores have holiday sales, making today and tomorrow a good time to purchase.

 

 

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