'Tis the Season for Saving: End-of-Year Tax Bill Deductions

posted 12/16/2013 in General

Tax bill deductionsThe hustle and bustle of the holiday season means another important deadline is looming: the end of the 2013 calendar year.  That means tax season is right around the corner!  We know it’s no fun to think about taxes yet, but there’s still time to make a few savvy moves to trim your tax bill before April 15.  
While not all of the ideas below apply to everyone, they can help you fund your retirement account, put you in a charitable mood, and more.
  • Contribute the maximum to your retirement account(s)- if you have a tax-advantaged retirement account (meaning your contributions aren’t taxed), contributing the maximum lowers your taxable income, meaning you pay less on your tax bill. Plus, you’re helping to fund your retirement as well.
  • Give to charity- as long as you have over $250 in costs directly related to helping a charity plus their acknowledgement (a receipt, statement, etc), you’re in good shape. Just be sure you also have the receipts from making all those meals or purchasing supplies.
  • Job-hunting costs- if you were job hunting at all this last year (and have the receipts on hand), these costs can be deductible. Eligible expenses include transportation costs, food, lodging, cab fare, employment agency fees, costs of printing resumes, business cards, etc.
  • Give to family or friends- give someone a great Christmas present AND reduce your tax burden! You can give up to $14,000 without having to file a gift-tax return, which lowers your taxable income, thereby reducing your tax bill.
  • Energy-saving home improvements- did you install new energy-saving windows or insulation this year and still have the receipt to prove it? You can claim a credit up to $500. While this isn’t a tax deduction, you can use the credit to help pay your tax bill if need be.
There may be other tax deductions you can make, but you’ll want to talk to your tax professional or an LSB professional to help with that. We hope these ideas give you something to think about as another year comes to an end. 
We hope to see you soon!
Lincoln Savings Bank, Member FDIC
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