Money saving tax chores to do before Dec 31

[❤ mollymouser ❤]

www.usatoday.com/money/perfi/taxes/2010-12-23-yearendtaxtips23_ST_N.htm

(excerpt)

Year-end tax tips used to be fairly straightforward, at least by the tax code's byzantine standards, but this has been no ordinary year. For most of 2010, taxpayers didn't know what their tax rates would be in 2011. Now, thanks to the compromise agreement President Obama signed last Friday, taxpayers have some clarity. Unless your personal situation will change next year — you're retiring, for example, or expect to get a big raise — your tax rate probably won't change. With that in mind, here are steps you can take before Dec. 31 that could lighten your 2010 tax bill ...

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[suzwantstobefree]

I read that - one thing that they didn't directly say though was to pay your January 2011 mortgage payment before the end of the year to get one more month of interest payments in 2010. I also try to increase my 401K for the last paycheck of the year. Although this year I maxed it out so that is not necessary.

[❤ mollymouser ❤]

Suz, that's a good idea about the pre-payment for January's mortgage.

[cronewitch]

One tax planning thing people who are marginal about itemizing can do is group deductions. Things you can adjust like the mortgage payment you can control somewhat. If you say are single so need about 5,500 to itemize and your property taxes and state taxes get you to 3,500 if you plan to pay 11 mortgage payments one year and 13 the next and group charity to the itemized year it might put you in better stead then just doing 12 payments and even charity.

Those of us with low mortgage interest sometimes are marginal for itemizing. For most unless they have medical they can group it doesn't help much.

[suzwantstobefree]

I feel so good about this years taxes - I already have everything organized just waiting on the 1099's and charity statements.

[❤ mollymouser ❤]

Suz, me too. I am just waiting on my wonderful DH's W-2 and interest statements from two banks.

[suzwantstobefree]

Oh and a W-2 too!!!!!!!

[mudflap81]

Kill your parents to avoid the inheritance tax.



Disclaimer: Mudflap81 does not condone or approve of killing your parents to avoid paying taxes.

[haapai]

My contribution to this thread is to grab your last pay stub and save it. (I don't get issued a paper stub and have to go find it before it gets blotted over with 2011 YTD info.) With it, you can do a mock-up of your 2010 filing. Without it, you're pretty much dead in the water until your W-2s arrive.

Sure, sure, some of you are salaried and haven't had anything change all year and can build that thing from scratch, but most of us need some YTD numbers.

Even if you have no idea how to translate the last pay stub of the year into a W-2, save the darn thing! When your W-2 arrives, you'll be able to figure out how the translation is done. Knowing how to do that translation is a pretty handy trick, so teach yourself how to do it!

[HoneyBBQ]

Sorry, could someone explain if it is a good idea to prepay your Jan mortgage if you are NOT on the brink for itemization?

[rumples]

I've never understood the whole prepay your January mortgage thing. That only works for one year. After that, you have to prepay every year in order to receive the entire 12 months of interest for the year.

[Gardening Grandma]

I've never understood the whole prepay your January mortgage thing. That only works for one year. After that, you have to prepay every year in order to receive the entire 12 months of interest for the year.

That was my thought as well. Besides, we don't see our pension deposit until Jan 2, so the only way to prepay would be to draw funds from savings.