Experts Give Tips to Reduce Your Taxes for 2011 by Acting Now before the End of the Year

While April 15th seems to be a long way off right now with Christmas, New Year’s and other holiday celebrations foremost in you mind, now is actually your last chance to take action which ca reduce the amount of taxes you have to pay on your 2011 Tax Return.

The government actually allows individuals to make deductible contributions to IRA accounts after the new year, but other ways to reduce your taxes and get a bigger tax return must be done before the end of this month.

Here are a few of the expert suggestions to help you pay less in income tax this April, if you act now:

#1 – 10% Tax Credit for home energy improvements
The federal government let you take a tax credit of up to 10% of the money that you spend improving the energy efficiency of your home. The total amount of the credit is $500, but it is a lifetime credit however, so if you have already made some improvements in the past and received a credit, you may not get a full $500.

This is a great way to save because in addition to the tax credit, in the long run you will also save on your power bills every year by adding insulation, caulking or sealing doors and windows, or other improvements to your homes energy efficiency.

#2 – Donations to Charities
Especially with new items coming into the home in the form of Christmas and Holiday gifts, this is a great month to go through the closet or the attic to identify the items which you don’t need or use any longer.

You will be surprised at how much of a deduction you can receive by taking your items to a local charity like Good-will or a similar non-profit thrift store. What’s more you will be helping others at the same time.

Also don’t forget to make cash or other donations to some other worthy charities like the Red Cross, St. Jude’s, or a wide range of other organizations which go a long way toward making lives better.

#3 – Sales Tax Deductions
For individuals living in states with no state income tax, you can still take a deduction for the sales tax in your state. However, this deduction is set to expire after this year unless congress acts to extend it.

If you are planning a big purchase like a car, appliances or electronics, you will be able to deduct the sales tax on your 2011 tax return if you make the purchase before the end of this year.

#4 – College Tuition Tax Credit
If you are paying for a student in college, you can take advantage of the American Opportunity Tax Credit by paying the tuition for the spring of 2012 before the end of 2011.

Families can claim $2000 in qualified expenses, plus 25% of the next $2000, for a total of $2500 per student for the first 4 years of college.