Resolving to Save Money?
If one of your New Year’s resolutions is to save more money in 2012, here are a few helpful suggesti0ns for you.
Grab Expiring Tax Breaks – Tax breaks are set to expire on December 31, but Congress is reportedly working on reauthorizing some of those breaks, but others may disappear permanently. For example, if you’re self employed and you need a new company vehicle, buy it now. You can write it off on your taxes as a business expense so long as it’s over six thousand pounds gross volume weight and is used 100 percent of the time for business purposes. If you’re trying to become more energy efficient, make those improvements before the end of the year and you’ll take advantage of a $500 tax credit that will expire in 2012.
Check Your FSA – If you have a medical flex savings account, you have a stash of cash to pay for medical, dental and vision expenses that aren’t covered by insurance. The catch is that if you don’t use it by the end of the year, you lose it. But the IRS passed a regulation back in 2005 that says employers must give workers an extra 10 weeks to cash in their FSA, but not all employers give that grace period, so check and see if you get the extra ten weeks.
Accelerate Other Deductions – Consider making your mortgage payment and paying other tax bills before the end of the year. That way you can reap the benefits of the tax savings a whole year early.
Contribute to a 529 – There are 37 states that allow you to claim an income tax deduction for contributions to the 529 college savings plan. To get the tax break before the end of the year, see if you can contribute online. For an up to date list of which states allow the deductions, click HERE.
Max Out Your 401(k) – If you haven’t contributed the maximum amount allowed, you may still be able to get money withheld in the last year into your 401(k). For 2011, you can contribute up to $16,500.