If youve done well with your investments and are looking at significant short term capital gains, prior to year-end is the time to offset some of those short term gains by selling some of the losing investments. If the scrip is good, you could sell it on 31st March and buy it back in the next financial year (1st April); here of course there is the risk of price fluctuation. Remember that you can carry forward short term losses from previous years losses for the next 8 years.
The minimum deductible for HSA-compatible health insurance plans in 2006 was $1,050 for individuals and $2,100 for families. In 2007 this will increase to $1,100 for individuals and $2,200 for families. If you currently have an HSA-qualified plan with the lowest eligible 2006 deductible, that deductible will automatically go up on January 1 to the new minimum.
You have until April 15 (or later if you file for an extension) to make your 2006 contribution. If you do not fully fund your account for the current year, you cannot make a catch-up contribution for 2006 after this deadline. However, you can reimburse yourself in later years for qualified expenses incurred in 2006, even if you do not have the funds in your account to reimburse yourself at this time.
Section 80DD – Expenses on the medical treatment of a dependent who is a person with a disability also qualifies for tax benefits under Section 80DD. In this case, deductions up to Rs. 50,000 can be claimed. A life insurance policy bought for the benefit of such a handicapped person is also eligible for this benefit up to Rs 50,000. In case the disability is severe, the claim can go up to Rs. 75,000. However, to claim any deduction under this section, certification by a medical authority is mandatory.
I often refer to this as the 3 most expensive words in the English language – Do It Yourself. The people who took this route were really forced into it. The options available to them didn’t have benefits that outweighed the cost so they were forced to reduce the cost. The number one way people reduced their cost was to do as much as possible themselves. The problem with this concept is that these people were not leveraging their intellectual capital. They were relying on their own knowledge and not that of proven professionals. Because they had nowhere to turn for professional help that was cost effective for them, they were relying on what little they could learn from the IRS website and tax guides in the bookstore. There was no low-cost, effective alternative to learning the tax-savings concepts that are critical to paying fewer taxes.