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A Brief Guide to Perfectly Legal (For Now) Tax Dodges

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Use it or lose it before 2010 dawns.

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Do you loathe those highly efficient people who make time to determine an end-of-year strategy for tax season? Or am I the only fool who'd rather send a few more bucks to Washington than sort through the contents of the recycling bin that doubles as my filing system?

Well, a few things are going on in Washington that could motivate even the laziest among us to reconsider inertia as a lifestyle choice at the end of 2009.

Such as:

1. You might actually be eligible for a cut of the vast economic stimulus spending that has dominated this year's headlines, in the form of tax credits for 2009.

2. Deficit concerns are likely to dominate next year's headlines. Washington will be looking for ways to raise cash through new taxes, higher taxes, or fewer tax breaks, aimed primarily at higher-income Americans.

The proposed "Botax" on cosmetic surgery is an example of this kind of creative thinking. (See also, Cosmetic Surgery Industry Rallies Against Botax.)

3. Some of the key Bush-era policies that kept taxes low for higher-income Americans are set to expire in the next year or so. So, Congress can increase taxes by doing nothing. How appealing is that going to be?

4. Most states are in worse shape than the federal government. They, too, will be trying to find ways to increase tax revenue.

So, below are some strategies you can use to grab a bit of the stimulus package, anticipate higher taxes ahead, and take advantage of tax breaks that might go away in the near future. Finally, there's a 2010 window in the retirement account policy that may make you want to think now about your tax strategy for next year.

Get Your Share of The Bailout


A few crumbs of the bailout didn't go to AIG (AIG). Here are some of them:

If you make your home more energy-efficient this year or next year, you may be able to get credits for 30% of the cost up to $1,500. The money comes out of the federal stimulus package.

You can get the credit for installing doors or windows, insulation, water heaters, reflective roof panels and solar-energy systems, or a cleaner-burning "biomass" stove, which can burn anything from wood pellets to cherry pits.

Make sure you check that the product has a "tax credit certification statement," not to be confused with the Energy Star label.

The credit continues through 2016 for more costly projects -- installation of a geothermal heat pump, solar panels, or wind generators.
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