taxes

Tax planning 2011: Smart moves to make now

Bunch deductible expenses
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Bunch deductible expenses)

Itemizing taxpayers can boost miscellaneous deductions by bunching payments in a single tax year.

Popular write-offs in this Schedule A category include unreimbursed business expenses such as professional journal subscriptions, work-related classes, legal fees and licenses, and job-required uniforms that you bought.

But you can only claim eligible expenses that exceed 2 percent of your adjusted gross income. To clear that deduction hurdle, make as many of these expenditures as possible by the end of the year.

If your budget is tight, you can pay them by Dec. 31 using a credit card. Allowable business expenses can be deducted in the tax year they are charged.

Of course, if you prepay these expenses this year, then you'll likely come up short in the miscellaneous deductions area the next tax year. So run some rough numbers to make sure it's worth accelerating these expenses now.

And note that the alternative minimum tax comes into play here, too. Miscellaneous itemized deductions aren't allowed at all under the AMT.


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