Tuesday, December 06, 2011

13 tax deductions

Here are 13 legitimate tax deductions that you can use to reduce your tax liability suggested by Don Pendleton, asset protection expert.

1. Make charitable donations to a organization ro cause that you have a commitment to.

2. Buy an automobile.  You can borrow money to buy the autombile.  The deuction in 2011 is $3000 for a small vehicle. A vehcile over 6000 pounds can be bought under section 179 and has greater deductions.

3. Use up flexible spending accounts like health savings accounts.

4. Purchase equipment for your business.

5. Deduct gambling losses from winnings.  Gains are offset by losses.

6. Buy business assets like toner, supplies to reduce any income.

7. Open up and fund an IRA. You have until April 15, 2012.

8. Hire family members a reasonable salary to do work for the corporation. If they are on your board of directors, you can pay for them to come to a board meeting.

9. Pay discretionary business expenses early such as pre-paying insurance.

10. Pay mortgage early so January and February mortgage is deductible in December.

11. Offset capital gains with losses. Sell stocks that are losing money.

12. Utilize residential energy tax credits  for windows and insulation.

13. Prepay state income taxes in December.