IRS Offers a Few Ideas to Reduce Taxes as 2013 Comes to a Close

With just under two weeks left in 2013, here are some tips you can use to  reduce your tax bill...and/or increase your refund.

• Make Charitable Contributions.  Make your 2013 deductible charitable contributions on or before Dec. 31. Give to a qualified public charity and keep a paper trail. Clothing and household items must generally be in good used condition or better to be deductible. Donations charged to a credit card by Dec. 31 are deductible for 2013 even if paid in 2014. You must be itemizing deductions on IRS Schedule A in order to benefit. Find complete details on all the rules in IRS Publication 526
  
  
• Contribute to a Retirement Account.  The maximum 2013 IRA contribution is $5,500 ($6,500 if age 50 or over). The maximum contribution for a retirement plan such as a 401(k) is $17,500. ($23,000 if age 50 or older) You can--assume eligibility--also deduct IRA contributions. Find more on IRAs in IRS Publication 590 and retirement plans in IRS Publication 575
  
  
• Get Credit for Retirement from the Retirement Savings Contribution Credit or “Saver’s Credit.”  This under-the-radar tax credit may be worth up to $2,000. It is available to you if you contribute to a retirement plan have income is generally less than $59,000 for a married filing joint return. (Half of that for single filers) IRS issued a news release reminder on the Savers Credit earlier this month.
  
  
• Check Investments and Consider a Portfolio Adjustment.  You can normally deduct capital losses up to the amount of capital gains plus an additional $3,000. If it's more than $3,000, you can carry the rest forward to future years. Find more on investments and your taxes in IRS Publication 550
  
  
• Winterize Now, Save on Taxes Later.   Homeowners still have some time to make energy saving home improvements. The Nonbusiness Energy Property Credit is to homeowners installing energy efficient improvements such as insulation, new windows or furnaces. The 2013 credit rate is 10 percent of the cost of qualified energy efficiency improvements and has a lifetime limit of $500. The Residential Energy Efficient Property Credit is for alternative energy equipment. It equals 30 percent of the amount spent on qualifying property such as solar electric systems or solar hot water heaters.

• Gift Giving.  Taxpayers can give a gift worth as much as $14,000 in cash or property in 2013 to another person without having to file a gift tax return. Gifts to individuals are not deductible. Find more on estate and gift taxes in IRS Publication 950
  
  
• Save Receipts and Paperwork.  Accurate record keeping provides a good reminder at tax time.