Contributed by Laura Lee, Accounting Program Chair Minnesota School of Business
The end of the year is fast approaching and even as we are preparing for the holidays, we should also be preparing our year end finances as tax season is not far away. Whether you are an accounting student, small business owner, or a home owner these tax tips could have an impact on the size of your celebrations.
Here are four year end tips to save you some tax dollars in 2013.
- Consider making a donation to your favorite charitable organization. Your donation is fully tax deductible, but make sure you have the proper documentation to support your donation. Examples would be cancelled checks, credit card receipts or a receipt from the charitable organization. I would recommend that you note on your receipt the type of donation you gave.
- Are you are in need of new appliances or a new roof? Consider purchasing eco-friendly products and you may be rewarded in the form of potential tax credits! By purchasing home appliances with the Energy Star rating, or installing a qualified roofing product that is eco-friendly, you can earn tax credits. Here is a link to the US Department of Energy where you can obtain additional information on this tax tip.
- Pay for your next semester’s tuition before the end of the year. The American Opportunity Tax Credit allows qualified taxpayers to get a benefit this year for next spring’s tuition, but only if you pay the amount PRIOR to the end of the year.
- Although this tip will not save you any money, it may keep you from losing some. If you contribute to a flexible spending account (FSA), make sure you use all of the funds prior to year end. You can use the funds on qualified, non-reimbursed medical expenses. Remember if you do not use all of the funds by year end you lose them.
Steps that you take now may help save you money in the end. So take a break from your holiday shopping and speak with an accounting professional before it is too late.