Although the year is almost over, you still have time to take steps that can lower your 2014 taxes.
Start a Filing System. If you don’t have a filing system for your tax records, you should start one. It can be as simple as saving receipts in a shoebox, or more complex like creating folders or spreadsheets. Keeping good records now will save time and help you file a complete and accurate tax return next year.
Make Charitable Contributions. Make sure to save your receipts. You must have a written record for all donations of money in order to claim a deduction. Special rules apply to several types of property, including clothing or household items, cars and boats.
If you plan to give to charity, consider donating before the year ends. That way you can claim your contribution as an itemized deduction for 2014. This includes donations you charge to a credit card by Dec. 31, even if you don’t pay the bill until 2015. A gift by check also counts for 2014 as long as you mail it in December. Remember that you must give to a qualified charity to claim a tax deduction. Use the IRS Select Check tool at IRS.gov to see if an organization is qualified.
Contribute to Retirement Accounts. You need to contribute to your 401(k) or similar retirement plan by Dec. 31 to count for 2014. On the other hand, you have until April 15, 2015, to set up a new IRA or add money to an existing IRA and still have it count for 2014.