With the end of the year quickly approaching and tax season just around the corner, now is the time to educate yourself and secure your financial future.
(PRWEB) December 26, 2011
“With the end of the year quickly approaching and tax season just around the corner, now is the time to educate yourself and secure your financial future.” states Chief Financial Adviser with 1st Financial Center. 1st Financial Center has researched and provided a few tips on how to maximize your tax savings before the year-end.
Avoid Tax Penalties
Under false pretenses, many of those who are struggling financially will avoid filing. Failure to file will generate a costly penalty, when all that is necessary is to file a tax extension. By not filing you will be charged 5% per month until you send in your return. This percentage is based on the unpaid balance of what you owe.
If you are strapped for money, you can usually arrange a payment plan with the IRS. Interest will be charged, yet the IRS is one of only a few agencies that offer a low interest rate at approximately .583%.
Donate to Charities
A great way to earn a tax break is to donate cash, property, clothing, household items or other goods of value to a recognized charity. It is important to remember that when donating any item for any value, you must obtain a receipt as proof for a deduction.
Expedite Bill Pay
Consider making payments such as medical bills, mortgage payments or property taxes in December. These payments, if paid before December 31st, are deductible on this year's tax return.
Adjust Your Withholding
Keep the money you earned! By adjusting your withholding, you can keep more of your money earned within the year rather than having it withheld from your check, only to be returned to you at a later time.
Defer Bonus' and Income
Hold off on being paid out your end of the year bonus. Instead, wait for next year. This will lower this year's taxable income.
Take Advantage of Tax Credits
There are many Tax Credits that can be utilized in order to receive more money back:
Energy Tax Credits
If, in 2010, you added energy efficient windows or made improvements to your house, you may be eligible for this credit.
Special Credits for Low-Income Workers
Earned income Tax Credit is a available for low to moderate income workers.
First Time Home-buyers Credit
Purchase a home in 2010? If yes, you may qualify for a first time home-buyer credit.
Be sure to you do your research and see if any of these credits apply to you. To find out if you qualify for any of these credits visit http://www.irs.gov.
With these tips you will be sure to maximize your tax savings! “By taking advantage of this great advice, individuals could potentially save more than they have in past years, and start planning for financial success.” states Chief Financial Adviser with 1st Financial Center.
Although these tips are not designed to get you out of debt, but intended to prevent future debt, other options are still available for those who struggle to save. For more money saving options, contact 1st Financial Center at (888) 755-4096 or visit us online at http://www.1stfc.com.