It's not too late to use these tax tips!

We are well past the tax year-end of December 31st, and the tax filing deadline (April 17th this year) is right around the corner, but there are still ways to minimize your tax burden. Read on to make sure you are taking advantage of your options.

1. Retirement Contributions

You have until April 17th to make a Traditional IRA or Roth IRA contribution for 2011. Depending upon your employer retirement plans, you may even be eligible to deduct your Traditional IRA contribution.

2. Deductions

Organize your expenses. While expenses you incur after year-end can’t be used for this upcoming filing, if you organize your 2011 expenses, chances are you will uncover some deductions you weren’t aware of. And if you use the standard deduction of $5,800 for singles or $11,600 for married couples you may find you get more bang for your buck by itemizing. There are the common deductions most taxpayers know about like home mortgage interest, but there are more obscure ones to be aware of, like miscellaneous deductions and medical deductions. Miscellaneous deductions, which includes things like tax preparation fees, investment management fees, job-hunting expenses and professional association dues can be deducted to the extent they exceed 2% of your Adjusted Gross Income (AGI). Medical expenses can also be deducted to the extent they exceed 7.5% of your AGI.

3. Any IRA Distribution (other than a Roth IRA)

If you have made $5,000 in non-deductible contributions to your retirement accounts, the assets grow to $6,000 and you withdraw the entire amount, only $1,000 is taxable. Many people overlook this because the tax form from the custodian shows a $6,000 withdrawal. Be sure to account for any “basis” in your retirement account withdrawals on your tax return since that portion should not be taxed.

4. Required Minimum Distributions

The IRS requires that you take Required Minimum Distributions (RMD) from retirement accounts starting in the year you turn 70 ½. If you reached age 70 ½ in 2011 and didn’t take your RMD, you’re in luck because you can still take it by April 1st, which is the grace period allowed for your first RMD only. If you miss the deadline, the IRS imposes a 50% penalty on the amount you should have withdrawn. Ouch!

5. Heed the Rules

The IRS doesn’t like when taxpayers don’t play by their rules. If a taxpayer doesn’t file a return or extension by April 17th a penalty of 5% of the tax due is imposed every month up to 25%. If the taxpayer doesn’t pay the tax, there is a penalty of 0.5% of the tax due every month up to 25% plus interest. If the taxpayer is just lazy and negligent in preparing their return, a 20% “accuracy” penalty of the tax due is imposed. And fraud? Well, aside from the possibility of wearing a zebra suit the IRS slaps offenders with a 75% penalty. Fortunately, avoiding these penalties and interest is in your control and there is still time to avoid it all.

6. Investment Property

If you purchased investment property in 2011 and are new to such a venture it pays to organize your records and be aware of the tax treatment of related activity, such as:

• To qualify as an investment property your personal use of the property cannot exceed the greater of 14 days or 10% of the days the property is rented during the year. For instance, if the property was rented for 300 days of the year, your personal use can be up to 10% or 30 days without jeopardizing the investment property status.

• Rental income is taxable in the year received, not the year the rent applies to.

• Security deposits are not taxable, although any amount you do not return due to property damage is.

• You can generally deduct any costs incurred to get the property ready to rent and those to maintain it, such as advertising, cleaning, repairs, homeowner’s dues, insurance, management fees, supplies, utilities, yard maintenance and any travel to the property if that is the primary purpose of the travel. If the primary purpose of the travel is other than the property you are limited to deducting the portion of your travel dedicated to the property.

• While repairs are deductible, improvements are not, but can be capitalized and depreciated. Examples of improvements are putting in a new patio or upgrading a kitchen.

• Investment property is considered a passive activity. In short, this means that your property losses can only offset property income and not earned income from a job. An exception to this comes into play if you own 10% or more of the property and make the major decisions about the property, in which case you can offset other income up to $25,000. This benefit does however phase out between $100,000 and $150,000 of Modified Adjusted Gross Income.

If you’ve gotten his far, you hopefully found one or two things that will keep an extra buck or two in your pocket this tax season, which we hope is a painless one for you!

Contributed by Kevin Mahoney, CFP^®, Integris Wealth Management