(No, it's not too late!)
Even this close to tax time, there are ways to reduce your 2007 tax bill. Here are just a few items that are frequently overlooked by taxpayers.
1.
IRA contributions. You may be able to make a 2007 contribution to a tax-deductible IRA (up to $4000, or $5000 if you are 50 or older) as late as April 15!
2.
Capital loss carry-over. If you had over $3000 in net capital losses in 2006, it is worth your time to determine if the excess can be carried over to 2007. This can be extremely useful if you had any net capital gains in 2007. Capital losses from prior years can offset the current year's capital gains without limitation.
3.
Standard deduction for seniors. When taxpayers turn 65, they can claim an additional standard deduction each year. For 2007, the additional amount is $1300 for single filers and $1050 per married person. Also, keep in mind that those who turned 65 on January 1, 2008, are treated as age 65 on the last day of 2007 and can therefore claim the higher standard deduction on their 2007 return.
4.
Credits for "going green." If you made your home more energy-efficient in 2007, you may be able to take advantage of a tax credit worth as much as $500. Such improvements include adding insulation, replacing drafty windows or buying a new furnace. In addition, the IRS has continued to fine-tune its list of consumer passenger vehicles which qualify for the Hybrid Motor Vehicle Credit. To make use of this credit, be sure to get documentation from the dealer noting the date of purchase and the amount of credit. Those who qualify must claim the credit on form 8910. For a list of all qualifying home improvements, go to
www.ase.org/taxcredits, and
www.irs.gov/newsroom/article/0,,id=157632,00.html provides a list of qualifying hybrids. Colorado also offers tax credits for the purchase of an alternative fuel vehicle in the year in which the vehicle was purchased, as long as the vehicle is titled and registered in Colorado.
Some financial advisors are only concerned with investments, but I prefer to look at every aspect of a person's financial picture, including how to save money on their tax bill. It pays to remember Ben Franklin's advice: A penny saved is a penny earned!
Pam Dumonceau is a Registered Representative/Investment Advisor Representative. Securities offered through AIG Financial Advisors, Inc., a registered broker-dealer and member FINRA/SIPC. Advisory Services offered through Asset One, LLC., a registered investment advisor.
Pam Dumonceau, Owner, Consistent Values, Inc., a Registered Investment Advisor in Aurora, Colorado may be reached at 303-804-0101,
www.ConsistentValues.com