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10 Year-End Tax Tips to Maximize Your 2013 Refund

10 Year End Tax Tips - TaxACT

Although the year is winding down, there’s still time to maximize your 2013 refund.

Here are 10 tips for saving more on your taxes before December 31:

10. Drain your Flexible Spending Account (FSA).

If you still have money left in your FSA, don’t let it go to waste. Check with your employer to verify your deadline—any unused funds may be lost if you don’t spend them by Dec. 31.

9. Make energy efficient home improvements.

You may receive a federal tax credit if you make qualifying energy efficiency improvements to your home before the end of the year. These improvements, such as installing efficient windows and doors, can also reduce your energy bills.

8. Review your Alternative Minimum Tax (AMT) situation.

Use TaxACT to see if you are subject to the AMT. Taking a tax deduction early could cost you money if it triggers this extra tax.

7. Max out your IRA contributions.

Unlike other tax benefits, you have until April 15 to max out contributions to traditional and Roth IRAs.

Contribution limits for both (as long as neither you nor your spouse was covered for any part of the year by an employer retirement plan) is the lesser of your taxable compensation (wages, commissions, self-employment income, alimony, etc.) or $5,500 per person for 2013 if you’re under age 50 ($6,500 if you’re age 50 or over).

The contribution limit is reduced at higher incomes.

6. Pay property taxes or mortgage payments early.

If you haven’t reached the maximum amount for your home mortgage interest or real estate tax deduction, pre-pay your January mortgage payment or your 2014 state or local property taxes.

5. Offset capital gains.

Review your investments to see if offsetting capital gains with losses is appropriate in your situation. Keep in mind your tax rate on long-term capital gains may be lower than your rate on short-term gains.

4. Review your medical expenses.

Starting this year, your medical costs must be more than 10% of your Adjusted Gross Income (7.5% if you are 65 or older) to take the medical expense deduction.

In previous years, the requirement was 7.5% for everyone. If you are close to your threshold, consider these possible deductible expenses.

3. Maximize your deductions for college tuition and student loan interest.

If you haven’t reached the deduction limits, pre-pay spring tuition or your January student loan payment.

2. Donate cash, clothing and household goods.

Donation Assistant in TaxACT Deluxe tracks and helps maximize your deduction with audit-backed values for more than 1,300 household items.

1. Sign in or start your TaxACT return today

For a step-by-step guidance through these and other tax savings tips for your guaranteed maximum federal refund go to taxact.com.

 

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