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| Your
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Doing your taxes is not as easy as ABC, but these
alphabetical tips could make the process less difficult and save you some money,
too. Check out these G, H and I tax opportunities to take or pitfalls to avoid.
 Gains
-- When you sell an asset and make money
on it (after first determining your correct basis that we talked
about earlier),
you have a gain to report to the IRS. This profit is generally referred
to as a capital
gain. But just how much in taxes you owe depends on the type
of capital gain you recognize, either long term or short term. And
the tax laws reward sellers who hold onto their property for a longer
period of time. When you sell an asset you owned for more than a
year, even just a year and a day is fine, any profit on its sale
is a long-term capital gain and is taxed at a more favorable rate:
15 percent for most taxpayers. By contrast, gain on assets you own
for a year or less before selling will be taxed at ordinary
tax rates, which could go as high as 35 percent. So if you have
a choice on when to sell an asset, your patience could pay off at
tax time.
 Hobby
-- You really enjoy taking photographs and are good
enough that you've socked away some extra spending money by accepting a small
fee for snapping shots at your neighbor's family reunion or a coworker's wedding.
But beware, that money is taxable income -- unless you can find a way to whittle
down your net take. One way to do this is turn
your hobby into a job. When you make your hobby into a legitimate income-producing
effort, tax breaks
follow.
 IRA
-- Most of us have some form of this popular type of retirement
savings plan. You can open a traditional
individual retirement account, favored by some people because
they then can deduct their contributions from their taxes. They
will, however, have to pay taxes on the IRA money when they take
it out at retirement. Other savers opt for a Roth
IRA. You can't deduct contributions to a Roth account, but when
you make qualified withdrawals from your account, the money won't
be taxed. Each type of account has eligibility requirements, primarily
based on income and age. Bankrate offers a table where you can compare
your IRA and other retirement account
options. With most IRAs, you have until April 15 (or the next
business day if the 15th falls on a weekend or holiday) to pick
an account and put your money in it so that it counts toward last
year's taxes.
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