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Last Minute Tax Tips for 2010

December 20th, 2010
Last Minute Tax Tips for 2010

There are several moves you can make this year to help ease your tax burden. But don’t wait another moment, because these opportunities expire when the clock strikes midnight on New Year’s Eve.

  • Mail your January 2011 estimated state tax payment in late December to claim the deduction in 2010.
  • Make your January 2011 mortgage payment on your residence this month to deduct the interest portion in 2010.
  • Charging donations or mail checks to charitable organizations on or before December 31 to accelerate the contributions you planned to make in 2011.
  • Purchase energy-saving appliances and other devices for your home in 2010 (take advantage of holiday sales) to qualify for the “residential energy credit,” which is 30 percent of qualified expenses up to a maximum credit amount of $1,500 over a two-year period (2009-2010).
  • Claim a college tuition tax credit of up to $2,500, available for individuals with incomes up to $80,000 ($160,000 for married couples) who paid at least $4,000 in college tuition in 2010. This is part of the Enhanced American Opportunity Credit for undergraduates, which expires this year. Tip: If you haven’t spend $4,000 yet this year, consider paying your student’s tuition for Spring Semester by December 31.
  • If you turned 70 ½ in or before 2010, you must take out your first Required Minimum Distribution (RMD) on your 401(k), 401(b) or 457 plan before December 31 or it may be taxed at 50 percent.

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