5 Tax Moves to Make by Dec. 31

News Report

Sales taxes shouldn’t be the only kind of taxes on you mind this holiday season. After a record-breaking year of 89 natural disasters (and a continued high unemployment rate), millions of taxpayers may be eligible for additional tax relief dollars.

Though the end of 2011 is fast approaching, consumers still have time to uncover – and act on – opportunities to increase a potential tax refund or reduce what they may owe when filing early next year, according to tax experts from Jackson Hewitt Tax Service in the Tampa/St. Petersburg area.

• Save more for retirement– By increasing retirement plan contributions, you can reduce your income for tax purposes. Taxpayers can contribute up to $16,500 to a 401(k), 403(b) or Federal Government Thrift Savings Plan; those over age 50 can contribute an additional $5,500.

• Prepay January payments in December– Taking care of your January mortgage payment, fourth-quarter state tax estimate or winter semester tuition now lets you claim these payments on your 2011 tax return.

• Get to the doctor – If you are holding off on a major medical procedure until after the holidays, stop procrastinating and make an appointment now to increase your 2011 medical expense deductions.

• Give to charity– Giving cash and non-cash donations to charity can give back on your taxes. And volunteering time counts, too, which means volunteers throughout the country may be able to deduct their out-of-pocket expenses on a tax return.    

• Save energy, save $500 on your taxes – If you are planning to buy an energy-saving hot water heater or install energy-efficient windows or insulation to your home, do it now. Up to $500 in credit may be available   for making energy-related home improvements.