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End-Of-Year Tips To Save On Taxes In 2012

Money (CBS)

Money (CBS)

Dorothy Tucker Dorothy Tucker
Dorothy Tucker has served as a reporter for CBS 2 Chicago since 1984....
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CHICAGO (CBS)– With less than two weeks until 2012, you may think there’s not much you can do to lower your 2011 tax bill.

Think again.

CBS 2′s Dorothy Tucker shows  several steps you can take right now to get a bigger refund in the new year.

Self-employment perks

If you’re in business for yourself, stock up on essentials like a new laptop or a computer desk.

Make sure you take full advantage of work-related expenses. For example:  Dry clean your uniforms, buy construction tools or reorder those magazines that are work-related before Jan. 1.

Pay bills in advance

Tax expert Joyce Godwin has another piece of advice for people who work from home: pay utility bills early for your home office.

“You want to pay that utility bill early because we get to take a portion of that for home-related expenses,” she says.

Buy big-ticket items

Another way to save: Buy a big-ticket item like a new company car now, before the end of the year.  You could see significant tax breaks.

Job hunting

If you’re unemployed, spend the last several days of the year looking for work. You can deduct cab fares as well as the cost of printing business cards and resumes.

Deducting home payments

Your house is a wealth of potential extra credit. One thing you can do is make January’s mortgage payment and pay real estate taxes before December 31st.

Prepay mortgage, real estate taxes

Your house is a wealth of potential extra credit. One thing you can do is make January’s mortgage payment and pay your real-estate taxes before Dec. 31.

Green your home

Don’t forget you can still get 10 percent off the cost of some energy-efficient items for your home, including windows and doors – up to a $500 maximum credit.

Prepay college tuition and fees

If you’re paying for college, pre-pay spring tuition and fees before New Year’s Day.

Boost medical expenses

Also try to fit in as many medical expenses as you can afford — those new glasses or that trip to the dentist or doctor. If you need a major procedure done, go ahead and schedule it for 2012. But Godwin says you can make the insurance co-payment before Dec. 31 to get the tax benefit.

New mom Elana Silverstein is lucky that baby Maya came right on time –  on Dec. 14.

She not only gets to claim medical expenses, but gains a dependent to lower her income by a few thousand dollars.

“I think it’s fantastic,” she says.

Donations

One of the best ways to lower your tax bill: Donate to charity.