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14 Ways to Save Taxes before December 31st

It has been a lousy year for business. One thing you do not want to do on top of that is overpay your taxes. You cannot do much after December 31^st to save money when you file your 2008 tax return. Unless you like overpaying taxes (psychiatric expenses would be tax deductible for you), here are 14 ways to cut your 2008 tax bill that your CPA perhaps did not tell you.

1. Job Hunting Expenses: If you have have been hit hard by the recession and have looked for a job - in the same line of work - all expenses directly related to that search are deductible: employment and outplacement agency fees, the cost of printing and mailing resumes, and travel expenses if the trip is to look for a new job. Even if you just need to drive across town for a job interview, you can deduct your mileage -- 58.5 cents a mile for travel on July 1 or later; 50.5 cents per mile for the first half of 2008. It does not matter whether you get that job. You cannot deduct job-search expenses for your first job or for a job in another line of work. This write-off is considered a miscellaneous itemized deduction (like employee business expenses and investment-related expenses) and is deductible only if you itemize your deductions on your tax return (reported on Schedule A of your 1040).

2. Moving Expenses: You may need to move for your new job, so you might be able to deduct your moving costs if the job is at least 50 miles farther from your home than your old job was. You do not need to itemize for this deduction.

3. Increase deductible retirement-plan contributions. If you have not maxed out your 401(k) or 403(b) contributions already ($15,500 per year in 2008, or $20,500 if you're 50 or older by the end of the year), boosting your contributions can help you lower your taxable income.

4. Sell stocks, mutual funds and other investments for a loss. Capital losses first offset capital gains. After that, you can apply your losses to offset up to $3,000 of ordinary income in 2008 (losses beyond that can be carried over to future years).

5. Deduct Alimony as well as Educator Expenses. These lower your adjusted gross income.

6. Lower taxable income from self-employment: if you have your own business or even just some freelance income on the side. Increase your deductible business expenses, such as buying business equipment, or office supplies by the end of the year.

7. Postpone billing to January 1st: You may also want to postpone some year-end billing until 2009 to minimize your income for this year.

8. Casualty losses: A casualty is the loss of property (including damage and destruction) because of a sudden event. The event must be identifiable, unexpected, and unusual. Events that meet these criteria include: car accidents, fires, floods, hurricanes, storms and vandalism. Also shipwrecks, terrorist attacks (God forbid) and volcanic eruptions! If you itemize, unreimbursed losses are deductible. It includes your policy deductible and any related damage not covered by insurance. In order to deduct you must first deduct your loss by $100 and reduce and then reduce the remaining amount by 10% of your adjusted gross income.

9. Make charitable contributions: Cash, appreciated securities, clothing, furniture any of these can be donated at the last minute. If you truly wait until the last minute, so long as your check is dated and sent by the end of the year, you are entitled to a deduction even if it clears in 2009.

10. Pay real estate taxes this year: Real estate taxes are deducted in the year they are paid. Some people pay their taxes late, and then have to deduct them on the following year return. Conversely, make sure to deduct 2007 real estate taxes you could not pay until 2008 on the 2008 return!

11. Buy a car, boat or airplane for the sales tax deduction: If you need one, buy it before year end to deduct the sales tax (if you itemize).

12. Enroll early for second semester: If you will qualify for a deduction or a credit for higher education expenses, consider paying the tuition costs for your children in December, even if the semester does not start until 2009.

13. Fix up the business premises: If you make minor repairs to your business building, you can deduct the cost in 2008.

14. Renew tax publications: You can deduct the cost of tax advice, including subscriptions to publications as a miscellaneous itemized expense.

We can prepare your 2008 tax returns, or ones that you have not filed for previous years, as well as returns for out-of-state. Also, we can do the bookkeeping you need to do to get your tax information ready. Our promise to you is to treat your tax return as we do ours: make sure we take every possible deduction and credit available - legally. Call us at (352) 589-6444 for more information or to set an appointment.

Allan Boress, CPA, CVA and Sherri Davis

Allan S. Boress, CPA ,CVA - Sherri Davis - (352) 589-6444