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Get Last Minute Tax Breaks and Plan for Next Year

1040 If your financial planning has included a reliance on certain tax breaks, you should be aware that a number of significant tax breaks are set to expire. As December comes to a close, some people rush to take advantage of possible tax breaks at the last possible minute—donating items to charities and doing other things to lessen the taxes that they owe. There is nothing wrong with the end-of-year rush, but some advanced planning can prevent that kind of scramble. If you didn’t spend this year strategizing how to lower your tax bill, you can still find ways to do this and then consider working with a Fee-Only financial planner next year. CNBC outlined a number of tax deductions that will end when 2013 is over.

Here are some possible deductions you can still get if you act fast:

  • Small business can deduct the cost of up to $500,000 is qualified equipment (in 2014 that maximum will be lowered significantly to $25,000).
  • Teachers can still deduct $250 of spending on supplies for their classrooms.
  • If you have a home loan that has been modified or forgiven during this year, you don’t have to list the forgiven amount as income.
  • You can still deduct sales tax from a federal return this year but that will change next year.

CNBC adds:

“Disappearing tax breaks aren’t the only thing to watch out for. This could be a big year for capital gains in mutual funds, as many have run through the losses they were carrying over from the financial crisis.”

If you don’t understand how mutual funds work, that last bit of information may not mean very much but you can get help. A Fee-Only financial planner oversees various aspects of your financial life and this includes recommending deductions that you can take. Even if you miss out on some of 2013’s expiring tax deductions, working with a financial planner means you can maximize possible deductions in the coming year.