Some Year-End Strategies for U.S. Taxpayers

• 23 Nov 2009

With year-end approaching, the experts at the Tax & Accounting business of Thomson Reuters suggest considering a number of strategies for saving on U.S. taxes. Among them:

• Take advantage of the annual opportunity to save taxes by placing funds in employers' Health Flexible Spending Accounts (Health FSAs) which use pre-tax dollars to pay for medical expenses that might not be deductible. Similarly, Dependent Care FSAs and Adoption Assistance FSAs are used to reimburse qualified expenses incurred with pre-tax dollars. Learn more.
• Make adjustments to employee contributions to 401(k) retirement plans and to state and federal withholdings. Learn more.
• Go green. If energy costs and environmental concerns have not yet motivated you, consider that nearly every taxpayer is eligible for tax credits for energy efficient improvements to their home. Installation of higher efficiency windows, doors, insulation, and roofs, as well as heat pumps, hot water heaters or boilers, solar, wind, geothermal or fuel cell equipment all offer the twin incentives of helping us to live in more environmentally-conscious  ways and reduce taxes. The purchase of a hybrid vehicle may also qualify for a tax credit. Remember that these purchases must be made before December 31 to claim credit on your April return.  Learn more.
• Take a 'free ride' on sales tax. Even if you buy a car that is not an energy saver, you can deduct the state or local sales or excise taxes paid on up to $49,500 of the purchase price - again if you buy before December 31, 2009. Learn more.

The Tax & Accounting business of Thomson Reuters is the leading provider of technology and information solutions, as well as integrated tax compliance software and services to accounting, tax and corporate finance professionals in accounting firms, corporations, law firms and government.