IT CAME almost like a whirlwind. Tax season 2010 is just right around the corner but there are still various opportunities to plan and save on your taxes….. legally and legitimately.
A real tax shelter
Purchasing a home is one of the best tax shelters available. The interest
and points you pay for the purchase of your home are deductible as itemized deductions. You may also deduct the property taxes paid on the home as an itemized deduction. Best of all, when you sell the home, you may be able to exclude the gain from income. There is no other investment that can provide the tax advantages like home ownership. However, great caution is advised before you dive in to buying a new one. Just consider the high foreclosure rate in today’s times but if it’s truly a good buy, go for it!
Deductible IRA
You may be able to benefit from a deductible traditional IRA contribution. The principal benefit from the IRA contribution is being able to deduct the amount of the contribution from your income in your tax return. The second, longer term tax benefit, is that the funds inside the IRA will continue to grow tax-free, which increases the rate of return when compared to a traditional taxable investment.
Hybrid cars and alternative motor vehicles
If you plan on purchasing a new car, consider a hybrid vehicle. You may be able to take a credit for certain hybrid, fuel cell, advanced lean-burn, and alternative fuel vehicles placed in service during the year. The credit is only available to the original purchaser of a new, qualifying vehicle. The amount of the credit is based on the Year, Make, and Model of the vehicle as well as when the vehicle was purchased.
Energy star tax credit
You may be eligible for a federal tax credit if you purchase an energy efficient product or renewable energy system for your home. If you are familiar with the ENERGY STAR products don’t think they all qualify for the energy tax credit because not all of them qualify. Your energy bills will be lower if you use the products with that label but, make sure your specific item qualifies before you try to take the credit for it.
Income deferral strategies
If you are planning to withdraw some of your retirement accounts such as 401k or 403b, wait until the start of 2011, especially if you’re already at a higher tax bracket.
If receiving bonus, ask your employer if it could be delayed until the start of next year.
Don’t sell any stocks or other investments if you could hold off on the profit.
Increasing deductions
It’s the perfect time to add to your church contribution or any other charitable donations.
Sell off investments with losses.
Increase your 401k or IRA contributions.
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Evangeline can be reached at her marketing location at the Ground Floor of Eagle Rock Plaza (in front of Jollibee), 2700 Colorado Blvd., Los Angeles, CA 90041 or at her business address at 450 N. Brand Blvd., Ste. 600, Glendale, CA 91203, phone number (323) 356-3803 or (323) 254-6787.
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The purpose of this article is to provide information of general interest to our clients and prospective clients. The information provided is general in nature and should not be considered complete information on any product or concept described.
(Advertising Supplement)
(LA Weekend Dec 4-7, 2010 Sec C p.4)
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