For Immediate Release
December 27, 2011
|CONTACT: Martha O’Gorman
Chief Marketing Officer
(800) 790-3863 ext. 8022
Liberty Tax’s 10 Most Impactful Influences on Your 2011 Taxes Before New Year’s Day
There’s Still Time to Take Some End-of-Year Tax Savings Measures
(Virginia Beach, VA) Although there are just a few days left in 2011, there are some timely tax measures and life events that may lower your tax bill for this year. Liberty Tax Service urges taxpayers to act quickly to reap the benefits from the ones that apply to them.
“Most people remember the tax filing deadline, but the deadline to take advantage of some tax savings measures is the final day of the year,” said John Hewitt, CEO and Founder of Liberty Tax Service. “One continuing way that you might still save on your 2011 taxes is to contribute the maximum amount that you can to a retirement account before the tax-filing deadline in 2012.”
Make an Extra Mortgage Payment
Extra payments in 2011 mean more deductible mortgage interest.
Pay State and Local Income Taxes Now
Payments made by checks or transactions dated in 2011 are deductible for tax year 2011.
Check Your Medical and Health Accounts
If you have a health flexible spending account (FSA) through your employer, increase the amount you set aside for next year. If you have a health savings account (HSA), you can make all contributions for 2011 up to the due date of the return not including extensions.
Check Your Possible Medical Deductions
Taxpayers should check to see if they have enough medical deductions to itemize (over 7.5% of AGI) this year. It may be possible to schedule a medical appointment quickly, purchase a pair of glasses or fill a prescription in the next few days that might make a difference. Or it might make sense to “bunch” medical deductions into one year, and plan ahead for 2012.
Small Businesspeople Can Buy Supplies Now
If you’re self-employed, buy supplies now. Self-employed taxpayers who use the cash method of accounting can pay bills on or before December 31, 2011 and claim the expense on a 2011 return. Stock up on necessary supplies and equipment. Remember to take advantage of the section 179 deduction for computers and other big ticket items put into service before the end of this year. For 2011, small businesses can expense up to $500,000 of the first $2 million of business expenditures considered section 179 expenses.
Add to Your Retirement Accounts
Taxpayers can contribute to their retirement accounts any time before April 17, 2012. The deductible amount for a contribution to a traditional IRA is up to $5,000 per person, up to $6,000 per person if age 50 or older. Workers age 50 or older can make additional contributions to their SIMPLE IRAs up to $2,500. If you’re self-employed, you can set up an Employee Pension plan and contribute the lesser amount of up to 20% of your net income or $49,000 before April 17, 2012.
Sell “Loser” Stocks
Perhaps you have experienced a stock market slide that has affected your portfolio. There’s still time to sell stocks or mutual funds and take the losses to offset your income.
Make Charitable Contributions and Donations Before the End of the Year
Generally, for individuals, contributions to tax-exempt charitable organizations are limited to 50 percent of the taxpayer’s adjusted gross income for the tax year. Those unused items cluttering closets can be donated to a qualified charity or non-profit organization and deducted as charitable contributions.
Make Residential Energy Efficient Improvements Now
For eligible property placed in service during 2011 homeowners may be able to claim a credit of up to $500 of the cost of certain energy efficient property. The residential energy credit may offer a tax break on a 2011 return if all installation is done and/or work was completed in 2011. Residential energy credits apply to homes, houseboats, mobile homes, condominium, and qualifying manufactured homes. The 2011 credit must be reduced by the amount of any residential energy credit taken after 2005.
Life Events Before New Year’s Day May Help Your Tax Situation
Couples tying the knot and getting married in the remaining days of the year will be considered married the entire year by the IRS. Filing status depends on marital status December 31. A child born on December 31 is assumed for tax purposes to have lived with the parents the entire year.
About Liberty Tax Service
Liberty Tax Service is the fastest-growing retail tax preparation company in the industry’s history. Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service has prepared over 9,000,000 individual income tax returns. With 42 years of tax industry experience, Hewitt stands as the most experienced CEO in the tax preparation business, having also founded Jackson Hewitt Tax Service.