2010 Tax StrategiesPublished:
With 2010 in full swing, it is important to consider the many tax strategies that you can use to better your situation. The more information you gather now the less you will owe in income taxes when you file your 2010 return.
One of the most popular 2010 tax strategies is the traditional IRA to Roth IRA conversion. This is a tax strategy that thousands upon thousands of taxpayers are taking full advantage of. The reason that 2010 is the time to make this move is simple: there are no income limitations. Along with this, the IRS is allowing you to defer tax on the conversion until 2011 and 2012. This helps to spread out your tax liability, which makes it an appealing tax strategy.
Another tax strategy to consider is one that allows you to take full advantage of energy tax credits. For 2010, there is a 30 percent energy credit up to a maximum of $1,500. If you are thinking about making any changes to your home, this may be the best year to do so. Qualifying items include energy saving appliances, energy star windows, high efficiency cooling and heating systems, and high efficiency water heaters. If you are in need of an upgrade at this time, you might as well take full advantage of this tax strategy. This way, you get what you need for your home while being able to save on your taxes.
Are you aware of the Tax Increase Prevention and Reconciliation Act (TIPRA) of 2005? If not, you may be missing out on a great tax strategy for 2010. With this, taxpayers in the lowest two brackets (10 and 15 percent) are not required to pay capital gains tax on long-term investments that are sold during 2010. Long-term capital gains come into play when you hold a security, such as stock, for more than one year, and then make a profit upon selling.
Finally, it’s a good tax strategy to do your best to plan charitable contributions. If you have a plan for donating money there is a much better chance that you will actually do so. Just remember this: you are required to obtain a receipt or letter from the organization if you make a donation of $250 or more. This tax strategy will come in handy when filing your return, as well as if you are audited by the IRS.
These 2010 tax strategies are simple to understand and just as easy to implement. Any tax strategy that can help you save money legitimately is one that you should consider.