Tax Tips

Summertime can be tax-cutting time

  

As warm summer days arrive, you may be tempted to forget about serious things like taxes. But that could lead to a higher 2009 tax bill. Here are just a few summertime tax-saving ideas to consider.

  • If spring cleaning left you with outgrown clothing and household items you no longer use, donate them to charity. Items in good used condition qualify for a tax deduction. 
  • If you and your spouse work, consider sending your children to a summer day camp. The cost may qualify for the dependent care tax credit.
  • If you operate an unincorporated business, consider hiring your children to work for you this summer. You can deduct reasonable wages paid to them for the work they perform, and there's no social security tax on their wages if they are under age 18. 
  • Summer is great for entertaining customers or clients. Keep records of the cost, the date, who was entertained, and what the business purpose was. Your tax deduction is limited to 50% of your cost. 
  • Combine business with your summer travel, and you may be able to take a tax deduction for the business portion of your costs.
By all means, enjoy your summer. But don't forget taxes. Give us a call for tax-cutters suited to your specific situation.
 
 
Making energy-saving home improvements could cut your taxes
 
Planning some home improvement work this summer? Make energy efficiency changes and you might be able to cut your 2009 tax bill at the same time. The 2009 tax law signed in February expanded energy tax credits in order to encourage homeowners to make improvements that will make their homes more energy-efficient and save money over the long run. Qualifying improvements - such as adding insulation, energy-efficient exterior windows, and energy-efficient heating and air conditioning systems - could cut your taxes. Previously the credit for energy improvements was 10% of the cost, with a $500 lifetime limit. The new law increases the credit to 30%, with a $1,500 limit. The new law also eliminates the cap on the 30% tax credit for alternative energy equipment, such as solar water heaters and geothermal heat pumps installed in homes.
 
For details and guidance in capitalizing on the enhanced energy credits for your home improvement projects, give us a call. We're here to help you benefit from every available tax break.

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