Tax savings before the end of the year - ABC 33/40 - Birmingham News, Weather, Sports

Tax savings before the end of the year

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Giving to charities is just one thing you can do to lower your income tax bill before the new year arrives. But with 2014, just a few weeks away - now is the time to see where else you can save money on this year's taxes.

Right now, people have spending on their mind for Christmas. But tax experts say, you might need to dig into your pockets a little deeper before the year ends to save you money in 2014.

"When you're talking about taxes, every bit helps." Ben Moon says buying equipment like this new cooler for Dreamcakes in Homewood is a big deal. It's a tax write off and savings strategy for business owners.
Moon says, "Being a small local business, we're not growing money on trees here. We kind of have to save where we can."

There's only a few weeks left to save as many pennies possible on your 2013 taxes.

"A lot of this tax planning does take a little bit of money. It's spending money you were otherwise going to spend, but spending it before the year's end." Brett Sheedy says make sure you fully utilize your retirement plan contributions -- and consider accelerating itemized deductions, like charitable contributions, you might normally do at the first of the year. "So how much are you getting in return for spending that money? It depends on what your tax bracket is. Lets say somebody in the 25% tax bracket; for every 100 dollars in charitable contributions they made, they're gonna save $25 on taxes."

Sheedy also suggests if you generally owe state taxes, make an estimated payment before the end of the year. State taxes are a deduction on the federal tax return. Also look at loss investments. "Stock is down and you don't expect it to come back, you may want to have your broker sell that stock before the end of the year, so you can take that loss on your return."

Because of the government shut down - the start of tax filing season is delayed two weeks. Sheedy says it's better to file as soon as possible so you know your tax debt and have adequate time to pay it by April 15th.

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