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Hack Your Taxes Before Jan. 1

Hack Your Taxes Before Jan. 1

    If you live in the U.S., the due date to file your tax return isn’t until next April. If you want to get some major benefits on your taxes, though, you have to take action before the end of the year: after all, in April, you’re paying taxes for the year of 2008. There are plenty of loopholes that can provide you with some significant advantages, depending on your financial situation. The list below is only a smattering of possible opportunities; it may be worth consulting with a tax professional about your own situation, especially since not all of these opportunities will be useful for everyone.

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    1. Make early payments. If you make your first mortgage payment of 2009 before Jan. 1, you can deduct the interest on this year’s taxes. The same goes for any property taxes that are deductible. However, if you expect to owe more taxes in 2009 than in 2008, it might be worth holding off on those payments so you can take the deductions on next year’s taxes.
    2. Get elective surgery. If you’ve already paid for medical expenses this year totaling 7.5 percent of your adjusted gross income, you can deduct any medical costs over that amount. If you’ve been planning to get some sort of surgery, scheduling it before the end of the year can pay off. Stocking up on your medical supplies and can also qualify, as can making improvements to your home for medical purposes (installing a ramp or pull bars, for example).
    3. Take a look at your investment losses. If you’ve taken significant losses in investments recently, you can offset capital gains on your taxes or — if you have more losses than you have gains, you can reduce your taxable ordinary income by up to $3,000 on your tax return.
    4. Sell a second home. If you’re working on selling a second home and you can close before Jan. 1, try to do so: a loophole closes at the end of the year that allows homeowners with multiple houses to defer the gain from the sale of other properties.
    5. Buy a Honda hybrid. I’d never suggest running out and buying a car just to get a tax break, but if you’re planning to buy a Honda hybrid soon anyhow, be aware that you can get a tax credit of $525 on it — up until Jan. 1, at which point the tax credit will be eliminated. There are other credits available for other clean-fuel cars.
    6. Sign up for a conference. Paying professional dues, getting certified, going to conferences and other job-related expenses are tax deductible after you’ve passed a certain threshold — two percent of your adjusted gross income. You’ll want to make the payment before the end of the year, however.
    7. Give to charity. A favorite way to reduce taxes for quite a while, giving a few dollars to charity now can help your taxes come April. Quite a few charities are struggling to meet demands right now, especially food banks, by the way. Before you sign the check, however, check IRS Publication 78 to make sure that you’ll be able to deduct the donation. You don’t have to give cash, by the way.
    8. Spend money on your class room. If you are an educator, you can deduct up to $250 for purchasing educational materials for your classroom.
    9. Top off your retirement account. There are a whole stack of tax advantages associated with 401(k), 403(b), and IRA accounts — I won’t go into all of them right here, but check what opportunities your retirement account gives you. You may need to put more money in to get the full benefit, though.
    10. Open a business. The amount of deductions you can take even if you’re just posting garage sale finds on eBay are incredible. You can deduct everything from a percentage of your mortgage to bank fees. You can even write off business debts.
    11. Refinance your home. If you have to pay points to refinance your home, you can deduct them over the life of your new loan.
    12. Get your taxes prepared. You can deduct the cost of having your taxes prepared either as a miscellaneous deduction on your personal return or as a business expense. The same is often true for any legal, accounting or financial planning fees that relate to tax planning.
    13. Go back to school. There are both deductions and credits associated with higher education. If you pay for next semester before Jan. 1, you can take advantage of the deduction this year.
    14. Search for a new job. If you’re on a job search, related expenses like hiring a resume writer or paying a fee to an employment agency can be tax deductible. If you have to move to accept a job, those expenses are also deductible.
    15. Take money from Mom and Dad for your student loans. If your parents help you to pay down your student loans, you can still deduct the interest. If anyone else helps you out, though, no one gets to deduct that interest.

    It’s important to remember that a lot of these moves don’t make sense if you’re just doing them for the tax break. However, if you were planning to get some sort of elective surgery or buy a Honda hybrid, for instance, it may be reasonable to move up your schedule for the tax benefit. Take a close look at your overall financial picture before moving forward. Because everyone’s situation is different, you may want to consult with a professional and rely on his advice.

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    Last Updated on November 5, 2019

    How to Cultivate Continuous Learning to Stay Competitive

    How to Cultivate Continuous Learning to Stay Competitive

    Assuming the public school system didn’t crush your soul, learning is a great activity. It expands your viewpoint. It gives you new knowledge you can use to improve your life. It is important for your personal growth. Even if you discount the worldly benefits, the act of learning can be a source of enjoyment.

    “I have never let my schooling interfere with my education.” — Mark Twain

    But in a busy world, it can often be hard to fit in time to learn anything that isn’t essential. The only things learned are those that need to be. Everything beyond that is considered frivolous. Even those who do appreciate the practice of lifelong learning, can find it difficult to make the effort.

    Here are some tips for installing the habit of continuous learning:

    1. Always Have a Book

    It doesn’t matter if it takes you a year or a week to read a book. Always strive to have a book that you are reading through, and take it with you so you can read it when you have time.

    Just by shaving off a few minutes in-between activities in my day I can read about a book per week. That’s at least fifty each year.

    2. Keep a “To-Learn” List

    We all have to-do lists. These are the tasks we need to accomplish. Try to also have a “to-learn” list. On it you can write ideas for new areas of study.

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    Maybe you would like to take up a new language, learn a skill or read the collective works of Shakespeare. Whatever motivates you, write it down.

    3. Get More Intellectual Friends

    Start spending more time with people who think. Not just people who are smart, but people who actually invest much of their time in learning new skills. Their habits will rub off on you.

    Even better, they will probably share some of their knowledge with you.

    4. Guided Thinking

    Albert Einstein once said,

    “Any man who reads too much and uses his own brain too little falls into lazy habits of thinking.”

    Simply studying the wisdom of others isn’t enough, you have to think through ideas yourself. Spend time journaling, meditating or contemplating over ideas you have learned.

    5. Put it Into Practice

    Skill based learning is useless if it isn’t applied. Reading a book on C++ isn’t the same thing as writing a program. Studying painting isn’t the same as picking up a brush.

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    If your knowledge can be applied, put it into practice.

    In this information age, we’re all exposed to a lot of information, it’s important to re-learn how to learn so as to put the knowledge into practice.

    6. Teach Others

    You learn what you teach. If you have an outlet of communicating ideas to others, you are more likely to solidify that learning.

    Start a blog, mentor someone or even discuss ideas with a friend.

    7. Clean Your Input

    Some forms of learning are easy to digest, but often lack substance.

    I make a point of regularly cleaning out my feed reader for blogs I subscribe to. Great blogs can be a powerful source of new ideas. But every few months, I realize I’m collecting posts from blogs that I am simply skimming.

    Every few months, purify your input to save time and focus on what counts.

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    8. Learn in Groups

    Lifelong learning doesn’t mean condemning yourself to a stack of dusty textbooks. Join organizations that teach skills.

    Workshops and group learning events can make educating yourself a fun, social experience.

    9. Unlearn Assumptions

    You can’t add water to a full cup. I always try to maintain a distance away from any idea. Too many convictions simply mean too few paths for new ideas.

    Actively seek out information that contradicts your worldview.

    Our minds can’t be trusted, but this is what we can do about it to be wiser.

    10. Find Jobs that Encourage Learning

    Pick a career that encourages continual learning. If you are in a job that doesn’t have much intellectual freedom, consider switching to one that does.

    Don’t spend forty hours of your week in a job that doesn’t challenge you.

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    11. Start a Project

    Set out to do something you don’t know how. Forced learning in this way can be fun and challenging.

    If you don’t know anything about computers, try building one. If you consider yourself a horrible artist, try a painting.

    12. Follow Your Intuition

    Lifelong learning is like wandering through the wilderness. You can’t be sure what to expect and there isn’t always an end goal in mind.

    Letting your intuition guide you can make self-education more enjoyable. Most of our lives have been broken down to completely logical decisions, that making choices on a whim has been stamped out.

    13. The Morning Fifteen

    Productive people always wake up early. Use the first fifteen minutes of your morning as a period for education.

    If you find yourself too groggy, you might want to wait a short time. Just don’t put it off later in the day where urgent activities will push it out of the way.

    14. Reap the Rewards

    Learn information you can use. Understanding the basics of programming allows me to handle projects that other people would require outside help. Meeting a situation that makes use of your educational efforts can be a source of pride.

    15. Make Learning a Priority

    Few external forces are going to persuade you to learn. The desire has to come from within. Once you decide you want to make lifelong learning a habit, it is up to you to make it a priority in your life.

    More About Continuous Learning

    Featured photo credit: Paul Schafer via unsplash.com

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