Some year-end tax tips (if the world doesn’t end today)

My watch beeped midnight only a short while ago.  Let the waiting game begin.

Matt Jabs gave me some comfort in telling me that the solstice wasn’t going to happen until 11:12 this morning.  But he didn’t say which time zone.  More seeds of doubt.

If we take the stance that the Mayans were wrong, then there will be a week and a half remaining of 2012 to take advantage of a few year-end tax tips.  I received a list of such tips from Lisa Greene-Lewis, CPA and TurboTax Blog Editor.  Here are my favorites from the list:

  • Give to charity. “Give to those in need while reducing your tax burden by donating clothes, household goods, or furniture to qualified tax organizations,” she writes.  The value of all items donated must be able to be justified, but any donations over $250 need for sure to have a written record.  If the donation is valued at over $5,000, you’ll need an appraisal.  (More information from the IRS.)
  • Get deductions for volunteering.  “Keep track of your mileage as you’re lending a hand to the community during the holidays,” she writes.  The mileage deduction for 2012 is $0.14 per mile.  Parking and tolls spent for volunteering for appropriate organizations also counts.  Your time, unfortunately, is not deductible.  Check Publication 526 for details.
  • Use up your flexible spending account.  If you’ve contributed throughout the year to a qualified medical / dependent care plan, be sure to use it in time, or you’ll lose it!  There may be a grace period that allows you to spend 2012 money in 2013, but it’s up to you to be sure.
  • Defer compensation.  Why pay tax now when you can pay it later?  If you had a year-end bonanza, you may consider asking to be paid in 2013.  Or, if you’re a business owner, you can invoice your customers in 2013.
  • Accelerate deductions.  Buzzer-beater bill payment for deductible expenses will let you score the deduction this year rather than next year.  If you’re over the floor for medical deductions, get them in this year because next year there will be a fresh floor to overcome.

Any other last-minute tax-saving tips, assuming we make it to 2013 unscathed?

John Wedding

Husband. Father. Web publisher. Musician. John has blogged at Mighty Bargain Hunter since 2005, helping people to recognize the good deals in life.

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Comments

  1. Thanks, you just reminded me about making my January mortgage payment in December.

  2. Balance your portfolio by selling loser stocks for a $3,000 tax deduction. Great way to clean the portfolio and lessen the loss impact.

  3. Yay, we survived the solstice!

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