SANATOGA PA – Tax deadlines are the last things most Sanatogans want to think about during the holidays. But while April 15 (2009) may seem far off, the Pennsylvania Institute of Certified Public Accountants (PICPA) says now’s the time to ensure taxpayers take advantage of breaks available to them in 2008.
Among opportunities to reduce a tax bill before 2009 begins, according to the CPAs:
- Maximize retirement savings. If your company offers a 401(k) plan, salary contributions to the plan allow contributors to defer tax on that salary until withdrawals are made. Without a 401(k), check out other tax-advantaged options, such as individual retirement accounts (IRA) and Roth IRAs. Contribute as much as the rules allow to these accounts before the year ends.
- Make charitable donations. Those planning to give gifts of cash or goods to charity should do it before Dec. 31. Tax return filers who itemize can deduct their donations on their 2008 tax return to reduce your tax bill.
- Think about taking a loss … really. It’s been a tough year in the stock market. Those who incurred losses on individual stocks, mutual funds, or other investments can hold on to what they own in hope that values will rise in the future. They also can choose to sell and take a loss on the investment. Sellers can deduct up to $3,000 in capital losses against their 2008 gross income when filing their tax return. Beware: selling might not necessarily be the right choice.