Ho, Ho, Ho! You better watch out.
You better not cry. But you better make some year-end tax moves this December or April 15 could turn out to be the tax equivalent of Santa Claus putting coal in your stocking!
Click image to watch
Santa's delivery route.OK, St. Nick can't deliver a festively wrapped tax return for you (unless he's even more magical than I think!) next year, but he does have a tax connection. His tracking of naughty and nice boys and girls basically is the same method that the Internal Revenue Service uses. That's why we all need to be nice, especially to ourselves, in this final month of the year by making some important tax-saving moves.
Dec. 1: We've been living with the Tax Cuts and Jobs Act (TCJA) for 11 months, but some of the provisions are still unclear and many more are confusing. That's why now is the time to
find a tax preparer who can help ensure you get the most out of or don't stumble over the TCJA changes. By
picking the perfect tax pro before the coming tax-filing season rush, your adviser can help make sure don't miss any year-end deadlines that could affect your final tax bill.
Dec. 3: Did you get a part-time
seasonal job to earn extra cash for the holidays? If you're paid as a
contractor instead of as an employee, remember that you'll be responsible for income taxes due on the money, as well as any self-employment taxes. The same tax considerations also apply if you're part of the
gig economy, but you'll also want to check out ways to maximize your
side hustle earnings.
Dec. 7: Medical itemized deductions survived the TCJA changes, but there's still a limit on how much you can claim on Schedule A. The good news is that the threshold for the 2018 tax year still is
7.5 percent of adjusted gross income.
Dec. 10: Does your job, either full-time or seasonal, include
tips? If so and you received at least $20 in gratuities in November, use
Form 4070 to report them today to your employer.
Click image
for a tip calculator.
And don't forget to include the
value of out-of-the-ordinary tips, such as event tickets of gift certificates.
Dec. 14: Have you been riding the stock market roller coaster, which has been a bit bumpy as 2018 winds down? Then you probably have some
capital gains you can take. The tax rate for long-term holdings likely is lower than your ordinary income tax rate, which makes such tax gain harvesting appealing. But even if you had some
asset losses, those bad investments could help you reduce or possibly zero out any tax on your gains. Plus, you might consider selling profitable holdings in order to
reset your basis.
Dec. 18: School may be out for winter break, but doing some tax homework can earn you a top tax grade. Pay tuition now for 2019 classes that will start in the first quarter of next year and you can use those costs to claim the
American Opportunity Tax Credit.
Dec. 21: It's the last weekend before Christmas! That means holiday treats, final decorations and frantic, crowd-fighting last-minute shopping! Or you can make some easy tax-favored gifts, like opening a
Roth IRA for your child or grandchild who earned some money from a summer or after-school job.
Dec. 24: Christmas Eve!
No taxes tonight. It's early to bed for kiddies of all ages. Santa's on his way!
Dec. 25: Merry Christmas! My gift to you is another day without tax thoughts.
Just enjoy the holiday and your family and friends.
Dec. 26: Happy
Boxing Day. This unofficial holiday on
St. Stephen's Day is celebrated by additional giving. If you donate to your favorite charity on this day or any other by the end of the year, you can claim the itemized deduction when you file your return next spring … as long as you follow the IRS'
donation tax rules.
Dec. 31: This is it. The drop-dead deadline to make most 2018 tax moves. So do a quick check.
Although the TCJA now limits — and eliminates — some itemized deductions, depending on your personal filing situation you might want to look at Schedule A options. It could still be worthwhile to make your January mortgage payment early so you can deduct the loan interest this tax year. Ditto with your
property taxes.
Don't forget to zero out your
medical flexible spending account (FSA) if your employer doesn't offer a grace period or
rollover. And if you must take a
required minimum distribution (RMD), do so — or directly
donate it — by year's end.
Done all that (and more)? Great!
Now go out and have fun
at your New Year's Eve party.
Small Business Tax Calendar: Important
filing, deposit and record keeping dates throughout the year that your company needs to know. You can get more tax calendar information at the IRS'
online calendar page and view the full year's important business and individual tax dates in
IRS Pub. 509.
Well! I didn't know that Uncle Sam can help in travelling also. Thanks for the tip.
Posted by: Get Rich Point | Thursday, May 31, 2012 at 12:14 AM