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Taking resolutions for the next year? Is anything more scary than the period of tax which haunts since its onset. See how you can help yourself to unburden the pressure.

1) Append extra to the 401(k):

This is inversely proportional. The more you add here, the lesser you pay for tax. You can do it now as well after all this is the best way to utilize your holiday incentives.For any holder if this plan the limit is a $15,500 but for a senior citizen it stretches till a whooping $20,500. Isn’t that great? You might as well consider increasing the Roth IRA if you have one through the employer. However your contributions remain taxable in this case and not the income that you earn.

2) Seize the tax credit:

Two energy tax credits will run out by the end of this month. You could have got a tax credit if you were thinking to make your home a little more energy efficient.

3) Analise your AMT paying capacity:

Most of us pay the alternative minimum tax. Find out more Calculate if you have to pay this tax. You will have to if you are anyone of the following:

a) If you are paying high state taxes
b) If you are paying high local taxes
c) If you are having a large family

So beware if you are a citizen of New York, New Jersey or California. H&R block has the capability to calculate whether you qualify for the AMT or not.

4) Be Charitable:

Donate to save yourself. You need proof for that as well like canceled checks, bank records etc and if your check does not clear then you wont be eligible for the deductions anyway. So the best way to go about it is by paying through credit card according to JK Lasser. This helps with an automatic proof.

So add a few cents to your comfort when it comes to the tax period coming year.

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