West Georgians still have two more days left to take advantage of opportunities to increase their potential tax refund or reduce what they may owe. Bremen CPA, Zachary Rogers says one good idea for small business owners is, if they are going to need new equipment in 2012, consider making that purchase before 2011 ends. "The IRS allows and immediate-expense reduction of up to $500,000 for equipment, instead of depreciating the items over several years," he says. "You must have the assets in service for the business before year end... in other words, you can't buy it and put it in a shed somewhere." He says this includes business vehicles although there are some limitations.
This year could be the last opportunity for consumers to take advantage of the Residential Energy Tax Credit. Rogers says if consumers plan to buy new windows, doors, a new hot water heater or insulation; or certain other items to improve energy efficiency in their home, they should do that before year's end. "The IRS will give you a 10% tax credit for those expenses up to $500," he says. "There are certain limitations on some improvements and this credit expires this year unless congress acts to extend it."
2011 could also be the last year for consumers to deduct sales tax in lieu of state income taxes on federal tax returns. "If your state with-holdings are low compared with sales tax paid during the year, deducting sales tax would be the best option," says Rogers. "If you don't have your sales tax receipts for the entire year like most of us, The IRS does have a calculator online that gives you an estimated sales tax amount based on your income, where you live, your exemptions." "On top of that," he continues, "some great news is that the IRS also let's you add to that any tax on major purchases such as a vehicle or major home improvements."
For those who have a little extra money to set aside, Rogers says they could save $500 or more on taxes, depending on their tax bracket, by contributing to a traditional individual retirement account (IRA). "The IRS allows you to contribute up to $5,000 to an IRA per year," he says. "The good news is that you can contribute to an IRA as late as April 17th, 2012 and still get a 2011 tax deduction." He says limitations do apply based on income and whether someone is covered by an employer's retirement plan.
Lastly, Rogers encourages tax-payers to consider making a charitable donation before year's end. "If you have some equipment, clothing, vehicle or some other items no longer in use, you'll be allowed to deduct the fair value of these contributed items on your taxes," he says. "You must get a detailed receipt or letter from the charity describing your gift if your property donation is greater than $250."
The last day to file taxes in 2012 is Tuesday, April 17th.