(KANSAS CITY, Mo.) – With the end of the year just weeks away, many people are scrambling to find last-minute ways to lower their 2009 tax bills. H&R Block offers five ways taxpayers can reduce their tax burden for this year.
- Make charitable contributions. Taxpayers have until Dec. 31 to make tax-deductible donations to charitable organizations. But, to claim the deduction on their 2009 returns, taxpayers must itemize their deductions and be able to substantiate the donation. For monetary gifts less than $250, a bank record or written acknowledgment from the charity is acceptable. For financial gifts of $250 or more, written acknowledgement from the organization is required. Clothing, household goods or other donated items must be in good used condition to qualify for the deduction.
- Pay 2010 spring tuition bills. Taxpayers who pay spring 2010 tuition bills now for themselves, spouses or dependents, may be eligible for education incentives that can lower their tax bills. The expanded Hope Credit is worth up to $2,500 per student for the first four years of college education. The Lifetime Learning Credit is worth up to $2,000 per taxpayer for qualified higher education expenses such as tuition or books. Taxpayers who don’t qualify for either credit may be eligible for a deduction of up to $4,000 for higher education tuition and fees.
- Waive required minimum distributions. Taxpayers who are 70½ or older in 2009 do not have to take required minimum distributions from IRAs and retirement plans. For those who don’t need the funds – or who need an amount less than the RMD – not taking the distribution may provide a tax savings in 2009. Also, there’s no requirement to take an additional distribution in 2010 if the 2009 RMD is waived.
- Sell stocks. Taxpayers with large capital gains this year may want to sell some stock to generate a loss before year’s end. Doing so could reduce the amount of tax paid. But, if a stock is sold to generate a loss, taxpayers can’t purchase identical stock within 30 days of the sale that generated the loss. Taxpayers should contact their tax professional to determine if this strategy is beneficial to their financial situation.
- Pay deductions early. Consider paying December mortgage and real estate property tax bills in 2009 even if they’re not due until January. Before doing so, though, taxpayers should estimate their 2010 taxes to ensure early payment won’t increase next year’s tax burden.
“By paying some expenses now, taxpayers may actually save money in April,” said Corey Sutton, district manager at H&R Block. “While there’s still time for taxpayers to take advantage of these last-minute strategies, they need to act before year’s end to lower their 2009 tax bills.”
Courtesy of Debbie Fitzgerald, 770-887-6060, email@example.com
About H&R Block
H&R Block Inc. is the world’s preeminent tax services provider, having prepared more than 500 million tax returns since 1955. In fiscal 2009, H&R Block had annual revenues of $4.1 billion and prepared more than 24 million tax returns worldwide, utilizing more than 120,000 highly trained tax professionals. The Company provides tax return preparation services in-person, through its H&R Block At Home™ line-up of do-it-yourself tax products, and through Best of BothSM, a tax solution which combines the ease of a do-it-yourself product with the experience and support of H&R Block tax professionals who review, edit and e-file the return for you. The Company also is one of the leading providers of business services through RSM McGladrey. For more information, visit the Online Press Center at www.hrblock.com/press.