A Little Tax Preparation Now Will Save You Headaches In 2008

Now that 2007 is drawing to a close, it’s a great time to take stock of this year’s income and expenses and see what you can do to lessen your tax burden for the year. Reuters offers several tips to help you increase your refund check (or reduce what you owe, if you’ve had one of those years). They also point out a couple of regulatory issues you might not be aware of that could trip you up if you’re giving gifts or funding retirement accounts.

To begin with, work out a plan for any charitable donations—make sure it’s all deductible, and that you take care of all of it before the end of the year. Also, remember that “this year for the first time, you need proof to back up every gift — either a bank record or a note from the charity.” Get an appraisal for anything of value that you donate, and if you give away a car, try to pick a charity that will use it instead of sell it—it’s likely to be worth more. If you’re a churchgoer, “you can pay next year’s church dues in December, even if you put it on a credit card, and take the deduction in 2007.”

Read the article for more tips and advice, especially on retirement accounts and the dreaded AMT.

“Personal Finance: The other tax season” [Reuters]
(Photo: Getty)

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  1. Chicago7 says:

    Just PAY your taxes and stop making such a big deal out of saving every penny. All the worry and expense of trying to save $50 on your tax return just isn’t worth it.

  2. hypnotik_jello says:

    all I gotta say is the AMT sucks bollocks and needs to be fixed.

  3. Beerad says:

    @Chicago7: Well, if you’re only putting $20 worth of worry and expense into it it’s totally worth it. And if it turns out to be a simple process to save an extra $200, so much the better.

  4. FullFlava says:

    @Chicago7:

    For most people, the difference is a lot bigger than $50.

  5. Sudonum says:

    @Chicago7:
    I save a lot more than $50 bucks when I itemize everything and take every LEGAL deduction the loaw allows.

  6. Sudonum says:

    @hypnotik_jello:
    I second that one

  7. junkmail says:

    @Sudonum: Agreed. For my wife and I, it’s a difference of several thousands of dollars. I’m pretty sure that’s worth the effort.

  8. Sam says:

    Is 2007 drawing to a close? Really? It’s the first week in October.

    File this post under the “Christmas Creep” category. Or maybe you should have a new one: “New Year’s Creep.”

  9. Chicago7 says:

    Hey, I worked for IRS for 3 years and did tax prep for another 3 years. 90% of the people who came in were angling for some “miracle” that would save them the big bucks on taxes.

    Most of them went away after filling out a 1040EZ or a 1040A with no big savings.

    There’s always some exceptions, but most of the hand-wringing and worrying is because of people trying to get some deduction that they aren’t really entitled to.

  10. Sam says:

    @Sam: That was missing something:

    ;-)

  11. IRSistherootofallevil says:

    Just like credit cards, car loans, ARMs, and other predatory contracts, the internal revenue code was set up for your failure. They WANT you to fail so they can “audit” you and steal more money from you. I’d say abolish the IRS, but then I’d feel the wrath of the government apologists in about, oh, 20 seconds.

    Ah, who cares? Abolish the IRS anyway.

  12. IRSistherootofallevil says:

    Oh, I forgot to mention, they also want you to fail so they can charge you “penalties” and “interest” and steal even more money from you. I mean, they’re going to charge you “penalties” for not telling the government how much they’re supposed to steal from you.

    Don’t forget to abolish the income tax as well as disbanding the IRS.