(NewsUSA) – If you owed taxes last year or received a refund that was larger than expected, it may be a good idea to adjust the amount you’re having withheld from your paycheck. As the end of the year looms, there’s still time to talk to a licensed tax specialist about your withholding and other possibilities for easing your tax burden.
Here are some tips for last-minute tax savings from America’s tax experts, the National Association of Enrolled Agents — a group of licensed tax practitioners who focus solely on taxation year-round.
* Increase or max out retirement contributions. Contribute more to your 401(k) to reduce your taxable income and your tax bill.
* Gift-giving is another year-end tool. For 2013, the annual gift tax exclusion is $14,000 ($28,000 for married couples making split-gifts). Qualified individuals can also make a gift to charity from IRA funds, but only through the end of the year.
* If you can itemize deductions, giving to charity may also reduce your tax bill. In addition to contributions made by cash, check or credit card, the crisp fall air may provide the energy to clean house looking for items in good condition that can be donated to a qualified charitable organization. Remember to make a list of the items and determine their fair market value. Clip the list to the receipt from the organization, and keep it with your tax documents for your records.
* Sometimes, a major life change is thrown your way, and you might not think of it as a tax deduction. If you found yourself looking for a new job, then agency fees, resumé expenses, career counseling costs and travel related to the job search may be deductible even if the job search was unsuccessful.
* On January 1, 2013, the new 3.8 percent net investment income (NII) surtax took effect. The surtax, which was passed by Congress to help fund health care reform, is imposed on the net investment income of higher-income individuals, estates and trusts that exceeds certain thresholds. Generally, the surtax applies to passive income but can also hit capital gains from the disposition of property. New strategies should be considered to minimize, if possible, the surtax. There is also a new 0.9 percent Additional Medicare Tax that reaches higher income individuals.
* Watch the news! Keep an eye on what’s happening with taxes as the year draws to a close. If Congress keeps to past practice, late tax legislation might mean a delay to the start of the tax-filing season. If any adjustments in your plan need to be made, you won’t be too late.
Get more tips and find an enrolled agent at www.naea.org.
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