USAA Mag has 5 good ideas for getting in good shape for tax season before the closing bell rings on 2008:
1. Pay deductible expenses by credit card
Charge a business expense, make a charity donation, or make another deductible expense in December, and it still counts for 2008. This way you don’t have to actually pay it until the bill comes in January.
2. Put your holiday bonus in an IRA
For low-to-mid income earners, you may be able to deduct all or some of your IRA contribution from your taxes under the IRS “Saver’s Credit.” More info here.
3 .Give to charity
Give to the needy, cash or clothes, and follow proper documentation procedures. It feels good, and you can deduct it from your taxes. IRS Publication 526 has the info you need.
If you have a second income, think about incorporating yourself as an “S” corporation and possibly getting big tax benefits. You can get Social Security/Medicare tax advantages. “The tax reduction, say, for a reservist with his own small business can be $3,000 to $8,000 per year, depending o the volume of the business and type of industry,” a CPA told USAA mag.
5. Make An Extra Mortgage Payment
Make your January ’09 mortgage payment now and deduct its interest this tax year.