If you’re just beginning to think about your clients’ 2011 income tax return (or your own, for that matter), you’ve got a late start – but it’s still not too late to cash in on some savings.
“A lot of the deductions associated with the economic stimulus package will disappear in 2012, so if you want to take advantage of them, you’ve got only until Dec. 31,” says Jessica James, CPA and author of Justice for None, an insider look at IRS tactics in a tax fraud investigation and trial.
But, she says, there’s still plenty of time for some other measures to ease you or your clients’ share of the tax burden. Now is also a good time to resolve to start earlier in 2012 to minimize that year’s tax bill. Here are a some tips for both 2011 and 2012 savings.
• Contribute to retirement accounts. If you haven’t already put money into your traditional or ROTH IRA account for 2011, you’ve got until April 17 to do it. If you have a Keogh or SEP (Simplified Employee Pension Individual Retirement Arrangement for businesses), and you get a filing extension to Oct. 15, you’ve got until then to make your 2011 deposits. The maximum IRA contribution for 2011 is $5,000, or $6,000 if you’re 50 or older by the end of the year. For self-employed people, the maximum for SEPs and Keoghs for 2011 is $49,000.