The end of the year is a fun time; it’s also an expensive time. The day before Thanksgiving is the busiest travel day of the year and airplane tickets are not cheap. Mr. Patterson and I paid just over $500 a ticket when we went to visit my brother and his wife in Cleveland for the extended weekend. Even if you don’t fly anywhere for Thanksgiving you still may have to shell out major bucks to feed everyone. Turkeys aren’t cheap, they usually run about $40-60. Then add on all the other foods and drinks to go with it and your grocery bill can easily run a couple hundred dollars.
Before you get done paying off that bill you’ve got to prepare for Christmas, the most expensive of all the holidays. As if it isn’t stressful enough figuring out what to get everyone on your holiday list, you’ve also got to figure out how to pay for it all.
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Since the last month of all of our lives have been quite expensive I thought you’d like to know some ways to save money, but you must hurry! To save money you must do these things before this Saturday, the last day of 2011. After that it will be too late. All of these tips are things you can do to reduce your 2011 tax bill. Yep…New Year…same old taxes. Dag Blam it!
If you can swing it, send the bank January’s mortgage payment by Saturday. This will allow you to deduct the extra interest payment from your 2011 taxes. This works with your property taxes too. Pay next month’s taxes before the year ends and you can deduct it from your 2011 tax bill.
Remember to max out your retirement accounts this week too. If you have a 401(k) plan at work you are able to contribute up to $16,500 for 2011. Check with the person who is in charge of your benefits (usually a member of your company’s Human Resources department) about adding in some extra cash before Saturday.
If you have an IRA, then you don’t have to rush. You have until April 17th, 2012 to make contributions for 2011. You might as well do it now though, because the longer you invest your money, the more time it has to grow!
Speaking of investments…take a look at your portfolio before Saturday. If you have any stock investments that have lost money, you should sell them this week. This allows you to offset any capital gains you might have had from any of your other investments. Even if none of your investments have made money this year, you can still use up to $3,000 of your investment losses to reduce your 2011 tax bill.
You can also take advantage of the home energy credit being offered for 2011. Just by adding insulation to your attic, replacing inefficient windows with new, energy efficient ones, or getting a new front or back door Uncle Sam will give you a credit of ten percent of the cost, up to $500. With three to four solid months left of winter, not only will you reduce your upcoming tax bill but you might also lower your heating bills for the rest of the winter. If none of those things appeal to you check out http://energytaxincentives.org/ for more information on what you can do to make your home more energy efficient.
Donating to your favorite charity is not only a nice thing to do but it’s also tax deductible! Write a check or donate via your credit card before this Saturday and you can deduct it from your 2011 tax bill. Even if the check isn’t cashed or payment isn’t debited until 2012, you can still take the deduction.
Make sure to check back with me every Wednesday. I’ll be giving away a lot of my best tax tips up until April 17th, 2012 (you get two extra days this year to file your returns because the 15th is a Sunday and the 16th is a holiday, Emancipation Day).
See you same time, same place next week! Have a happy and safe New Year.
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