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.