Last Minute Tax Stuff You Can Do
BOSTON (CBS) - I don't know what Congress is planning to do regarding tax changes. What I do know is that every year around the third week of December Congress decides to tweak the tax code.
So how do you plan? For most of us, I don't think we'll be radically affected next year so if you plan to itemize on your tax return you should be looking at ways to increase your deductions for this year.
- If you pay estimated taxes – pay the last quarter of your state tax in December instead of the January 15th deadline.
- Bunch your medical deductions if you are already over the 10% threshold of income. Pre-pay any medical or dental bills such as kid's orthodontist bills. Also, keep track of the miles you have traveled for they are also deductible at 23.5 cents a mile. The easiest way to do that is check your calendar to calculate how often you have been to the hospital and doctors. The threshold is lower 7.5%, if you are over 65.
- Pay your real estate taxes in December instead of January if you can use the deduction this year.
- It may not be too late to increase your contributions to your retirement plan if your plan will allow it. And you may even be able to do the catch up in a lump sum. Check with your plan provider or benefits department. Also make some plans for next year and try to contribute the maximum you can afford.
- Clean out the closets and make a charity run to one of the Goodwill or Salvation Army drop off centers. Be reasonable as to what you take as a deduction. Remember, it is used clothing you are giving them. According to the IRS, you can no longer claim deductions for used clothing and "household goods" that are not in "good" condition.
Check the Salvation Army's website to get a list of suggested deductions.
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