With all the other year-end obligations taking up your time, an Iowa financial consultant recommends you also carve out an hour to get your finances in order before 2013 arrives.
Jeff Strawhacker, a CPA in West Des Moines, says the chore of doing your state and federal taxes in a few months will be much easier if you’ve kept good records.
“Start planning early, start gathering your data so it’s organized and ready to roll,” Strawhacker says. “Keep in mind things you need to look at. Quick examples, if you’re going to make an IRA contribution, start planning that. If you have children in college, take a look at the education credits. If you refinanced your house this year, which thousands of people have done, your refinance fees, some of those may be tax deductible.”
Many Iowans are getting phone calls and letters from various charities pleading for year-end contributions. If you didn’t make many charitable donations in 2012, Strawhacker says there’s still time — and it’s a great way to boost your deductions on next year’s tax forms.
“Normally, if you’re giving away contributions, the maximum you can deduct in a given year is limited to 50% of your income,” Strawhacker says. “So, whether it be cash, property or whatever, there are some other limitations but for the most part, that’s the general rule.”
If you’ve cleaned out your garage, closets and shed, loaded up the van and are ready to haul all of that stuff to your chosen charity, he says keep the camera handy as you unload.
“If you’re giving away property, clothing, household goods, there are valuation guides that you can pull,” Strawhacker says. “I know the Salvation Army has one, Goodwill has one. It will give you an idea of what those items are worth if they’re in good or excellent condition. If you do that, keep a detailed list, take some pictures of the items you’re giving away and that can become a nice tax deduction for you.”
Of course, those donations will have to be made before January 1st arrives for them to count on this year’s taxes.