There is Still Time to Reduce Your 2011 Taxes

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Submitted by Suzonne V. Cowart  
    There are only a few weeks left in 2011 to reduce your taxes. Both individuals and businesses can participate in tax reducing activities before the end of the year. Many tax-saving provisions for individuals and businesses are set to expire at the end of 2011.  Therefore, it is important to take advantage of these now.
– Teachers’ $250 classroom expense deduction.
– Prepay higher education tuition for 2012 at the end of 2011. Deductions up to $4000 may be available depending on income levels.
– Contribute to your Retirement Plan. IRA contributions up to $5000 ($6000 if you’re 50 or older) may be deductible. Consider maximum contributions for SIMPLE or 401(k) plans as well.
– Home Energy credits for improvements such as insulation, windows, doors, and certain roofs are still available in 2011.
– Capital gains will increase from 15% to 20% after 2011. Consider transactions subject to capital gains now rather than wait until 2012. This would include sales of stocks and other capital assets.
– Bonus depreciation is currently at 100% for 2011 and will be reduced to 50% in 2012. The 100% bonus depreciation is available for “new” assets placed in service by the end of 2011
– Section 179 expensing elections are available for qualified assets up to $500,000.
– Consider establishing a Retirement Plan for your small business. Tax credits up to $500 may be available for the first 3 years of the plan.
Suzonne Vicknair Cowart CPA
Disclaimer: This article is intended to educate and provide information. In no way does the article give complete tax advice nor does it guarantee a specific outcome. Professional tax advice should be sought related to individual and specific tax circumstances.

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