The 2011 tax season is just waning, but it is never too early to think of the next one. Planning is your best tool to minimize the amount of money that you have to tithe to the taxman. Here are three quick tax tips for 2012.
- Are you saving for your child’s college tuition? Look into a state 529 plan. In many states, but not all, you will receive a credit on your state tax burden.
- Unfortunately, many people are still in danger of foreclosure or short sale. The feds are offering a tax break that is set to expire in 2012. Normally, debt that is canceled (remaining balance on a mortgage) is treated as taxable income. The IRS is offering a break if the canceled debt is less than $2 million for joint filers. This could be a big benefit for people considering debt settlement in Alabama.
- Many of us drop off items at Goodwill or other charitable organizations then walk away unaware of the tax goldmine we just left behind. Use a valuation guide from Goodwill or the Salvation Army to calculate what the goods are worth. It could save you hundreds at the end of the year.
The IRS offers plenty of tax breaks that most Americans are unaware of or think do not apply to them. Staying tax savvy is the best way to avoid paying Uncle Sam at the end of the year.