We’ve made it through the 2011 tax season and now it’s time
to hone in on 2012 taxes. You have
exactly 20 days left in the year to take tax action. Here’s a few tasks you can take on to help
you pay as little as possible in taxes next year:
Donate any good condition, unused clothing, apparel, shoes, and accessories are
to your local charitable organization.
Keep in mind you must donate all items to a qualified organization.
Giving money to political organizations and individuals (especially not your
college-age children) doesn’t count. To find a qualified organization,
use the Charity
Navigator or a similar site to find deserving nonprofits that serve
causes you care about.
eSmart Tax makes it easy to keep track of your eligible
charitable tax deductions with our Charity Deductions calculator. To learn more, visit our Premium Edition
Contribute as much as you can to retirement accounts: In 2012, you can contribute up to $17,000 to
your 401(k) or other employer-based plan. if you're 50 or older you can
contribute a maximum of $22,500. You can also contribute up to $5,000 ($6,000
if you're 50 or older) to an IRA where contributions to traditional IRAs may be
Give gifts before the end of the year: This is especially important because the
estate tax and lifetime gift tax exemption will drop to $1 million, from $5.12
million if Congress does not take action.
The maximum estate tax rate will also jump to 55% from 35%. Talk to your estate-planning attorney or tax
advisor for the best way to handle this upcoming change. Individuals should also look to consider the
annual $13,000 gift tax exclusion. You can give $13,000 to as many individuals
as you like, tax-free (married can give $26,000 per recipient.)