More Year End Tax Tips

A few weeks ago (Nov.18) I wrote about some year-end tax tips. I came across an article this weekend by Lynn Brenner in Philadelphia Inquirer's Parade Magazine which had a few more interesting tips. Act quickly though as you have less than 3 weeks until the end of the year.

Remember that charitable donations made before December 31 are tax deductible next April. This includes the value of used clothing or household goods you gave away in 2006. If you are short cash, you can contribute by credit card (personally not a big fan of charging donations, but to each his own) and still claim the deduction even though you won't pay the bill until 2007. Don't forget that you can claim the cash donations you give to the church at Sunday collection or to the Salvation Army Santa, as long as it's under $250 per contribution.

If you contributed to a Flexible Spending Account (FSA) make sure you use it up by December 31 or you lose it. Some employers may have different deadlines, so check with your HR dept. for the deadline. Also get a list of eligible expenses. There may be some over the counter medications or items (like humidifiers or blood pressure monitors...) that you need which are eligible.

You should also check out the Saver's Tax Credit. You may qualify for this tax credit if you contributed to an employer sponsored plan like a 401k or to an IRA or a Roth IRA. You will get a tax credit for a percentage of your eligible contributions up to a certain amount if you meet certain criteria. You qualify if you are at least 18 by the end of the tax year and made less than $25,000 for single filers or less than $50,000 for joint filers. You do not qualify if you are listed as a dependent on another person's tax return, or if you are a full-time student. You can get some more detailed information about the Saver's Tax Credit at
http://www.investopedia.com/articles/retirement/04/031704.asp