Dec. 31: A red-letter tax day
2007 is fast disappearing. That means you have just a few days to make some must-do tax moves.
Luckily for us taxpayers, the calendar gods have given us an extra business day this year.
So let's not waste any more time!
Start with charitable donations. You've got to make them by Dec. 31 in order to claim them on your upcoming Form 1040, Schedule A.
That's also the final day to make any changes to your investment portfolio and have the results affect your 2007 return. If you are expecting lots of taxable unearned income, you can offset that amount by selling some assets that have declined in value.
Or you can combine investing and philanthropy and donate appreciated stocks to your favorite charity. This story on atypical giving options has more details on this (and other) ways to contribute beyond simply writing a check.
Make your Jan. 1 mortgage payment by the end of December in order to deduct the interest against this year's income.
The sales tax deduction is still available, and any tax on a motorized vehicle you buy by the end of the year can be added to the tax tables the IRS provides.
You can wring extra tax savings out of an auto purchase if you opt for a hybrid. The tax credit for these fuel-efficient vehicles continues for most makes, but to get the full tax value for a Honda hybrid, you must drive one off the the lot by Dec. 31.
More year-end moves: A couple of weeks ago, I blogged on this very subject here, but it's always worth a repeat when it comes to actions that will help you cut your 2007 tax bill.
This Bankrate story also has my top 10 year-end tax moves. And last week I did an interview on NPR's Morning Edition (click here for the audio link) on the topic.
My fellow tax blogger William Perez at About.com: Tax Planning suggests a dozen tax moves to make by Dec. 31.
And Kiplinger comes up with 15 ways to reduce your 2007 tax bill if you act quickly.
Comments