Your Christmas shopping list is history, however you should be checking another list —your end-of-the-year tax checklist.
Carolyn Strobel, an accounting professor at the Darla Moore School of Business, says that everyone needs to take one last look at the expiring tax credits for energy efficient appliances and ways to make your home more energy efficient.
Strobel says homeowners have a few days to take advantage of the tax credit, up to $15,000, as well as help reduce energy costs down the road.
That began last year, but it extended into this year as well. So if you haven’t gotten around to doing that, there’s time to go out and buy storm doors, storm windows, more energy efficient windows or even insulation, although probably that’s getting pretty close.
Strobel says this tax credit was not extended in the tax cut legislation recently passed.
Regarding charitable contributions, Strobel says tax rates are not going to change for individuals in the next two years, thanks to an extension, but charitable contributions made at the end of the year will help overall to reduce an individual’s tax burden.
Charitable contributions need to be made before January 31 and taxpayers have until April 15 to fund IRA’s. Strobel says saving for retirement is something everyone should do.
I just encourage people to save for their retirement, because I think that’s probably the most important thing they could do. So, if you haven’t set up an IRA, to do that. If you have an opportunity through your work to contribute to a 401K plan next year, or a 403B plan, a 457 plan, you certainly should go ahead and do that.
Strobel says that if we look at the tax plan by the committee that was set up by the President, some of the deductions will be to taken away.
If we look at the tax plan that the committee that President Obama set up, they are encourging the idea of taking away some of what we call tax expenditures, and these would be the ability to deduct certain itemized deductions, some of the credits probably would be scaled back, and both of those things will help to broaden the tax base.
Her advice is to take advantage of every tax deduction possible before the end of the year.