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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 September 17, 2018

    Why Do I Have Bad Luck? 2 Simple Things to Change Your Destiny

    Why Do I Have Bad Luck? 2 Simple Things to Change Your Destiny

    Are you one of those people who are always suffering setbacks? Does little ever seem to go right for you? Do you sometimes feel that the universe is out to get you? Do you wonder:

    Why do I have bad luck?

    Let me let you into a secret:

    Your luck is no worse—and no better—than anyone else’s. It just feels that way. Better still, there are two simple things you can do which will reverse your feelings of being unlucky.

    1. Stop believing that what happens in your life is down to the vagaries of luck, destiny, supernatural forces, malevolent other people, or anything else outside your self.

    Psychologists call this “external locus of control.” It’s a kind of fatalism, where people believe that they can do little or nothing personally to change their lives.

    Because of this, they either merely hope for the best, focus on trying to change their luck by various kinds of superstition, or submit passively to whatever comes—while complaining that it doesn’t match their hopes.

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    Most successful people take the opposite view. They have “internal locus of control.” They believe that what happens in their life is nearly all down to them; and that even when chance events occur, what is important is not the event itself, but how you respond to it.

    This makes them pro-active, engaged, ready to try new things, and keen to find the means to change whatever in their lives they don’t like.

    They aren’t fatalistic and they don’t blame bad luck for what isn’t right in their world. They look for a way to make things better.

    Are they luckier than the others? Of course not.

    Luck is random—that’s what chance means—so they are just as likely to suffer setbacks as anyone else.

    What’s different is their response. When things go wrong, they quickly look for ways to put them right. They don’t whine, pity themselves, or complain about “bad luck.” They try to learn from what happened to avoid or correct it next time and get on with living their life as best they can.

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    No one is habitually luckier or unluckier than anyone else. It may seem so, over the short term (Random events often come in groups, just as random numbers often lie close together for several instances—which is why gamblers tend to see patterns where none exist).

    When you take a longer perspective, random chance is just . . . random. Yet those who feel that they are less lucky, typically pay far more attention to short-term instances of bad luck, convincing themselves of the correctness of their belief.

    Your locus of control isn’t genetic. You learned it somehow. If it isn’t working for you, change it.

    2. Remember that whatever you pay attention to grows in your mind.

    If you focus on what’s going wrong in your life—especially if you see it as “bad luck” you can do nothing about—it will seem blacker and more malevolent.

    In a short time, you’ll become so convinced that everything is against you that you’ll notice more and more instances where this appears to be true. As a result, you will almost certainly stop trying, convinced that nothing you can do will improve your prospects.

    Fatalism feeds on itself until people become passive “victims” of life’s blows. The “losers” in life are those who are convinced they will fail before they start anything; sure that their “bad luck” will ruin any prospects of success.

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    They rarely notice that the true reasons for their failure are ignorance, laziness, lack of skill, lack of forethought, or just plain foolishness—all of which they could do something to correct, if only they would stop blaming other people or “bad luck” for their personal deficiencies.

    Your attention is under your control. Send it where you want it to go. Starve the negative thoughts until they die.

    To improve your fortune, first decide that what happens is nearly always down to you; then try focusing on what works and what turns out well, not the bad stuff.

    Your “fate” really does depend on the choices that you make. When random events happen, as they always will, do you choose to try to turn them to your advantage or just complain about them?

    Thomas Jefferson is said to have used these words:

    “I’m a great believer in luck and I find the harder I work, the more I have of it.”

    Ralph Waldo Emerson said:

    “Shallow men believe in luck. Strong men believe in cause and effect.”

    Your luck, in the end, is pretty much what you choose it to be.

    Featured photo credit: LoboStudio Hamburg via unsplash.com

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