November tax moves to help you avoid tax turkeys
Monday, November 03, 2014
Here we are, into the final two months of the year. That means much of our time will be spent thinking about getting ready for cold weather, use-or-lose vacation days and the rapidly approaching holidays.
But we also need to think about taxes.
November is the perfect month to take some steps so that you don't have to deal with tax turkeys at filing time.
Wild turkeys photo by Yathin S. Krishnappa via Wikimedia
Vote! Many folks will get a direct say on their states' tax policies when they vote tomorrow, Nov. 4. Among the almost 150 ballot questions across the country are 20 tax-related initiatives in 11 states.
The biggies are in Georgia, where voters can set a 6 percent ceiling on the state's individual income tax rate; Tennessee, where an initiative would constitutionally ban any future state and local income or payroll taxes (the current tax on some investment income would be grandfathered); and Illinois, where voters will let lawmakers know whether they think a 3 percent surtax on millionaires is a good idea.
Seasonal work and taxes: Income taxes are always a big concern for workers. If you're looking for or have already landed a seasonal job to bring in some added holiday income, pay attention to how you're paid.
If you're a contractor instead of an employee, you must take care of paying estimated income and the self-employment taxes that are usually withheld from employees' paychecks. Overlook this and you'll owe not only the taxes at filing time, but probably penalties and interest for underpayments, too.
Portfolio tax moves: Have you hung in there as the stock market roller-coastered this year? If all your holdings haven't recovered, you might want to sell the losers. They could help offset any gains you've had, thereby reducing your potential overall tax bill.
If you have more losses than gain, you can deduct up to $3,000 a year against your ordinary income until you use up those losses. In this case, though, you also might want to consider hiring a new investment adviser!
Travel and taxes: Many of us will travel to family gatherings for Thanksgiving. Some folks also are hitting the road for business. If you can combine personal and business travel, carefully document the work-related expenses so you can deduct the costs.
When Turkey Day does arrive, take a break from taxes for food, football and family time.
You'll still some time after you recover from your tryptophan-induced coma, fandom meltdowns and inevitable family overload to take care of other tax tasks.
But instead of waiting until the last monthly minute, check them out pre-holiday. You'll find plenty of November Tax Moves in the ol' blog's right column, under the bright red heading of the same name, just below the countdown clock ticking off the time left in the 2014 tax year.
Following through now on the tax moves that fit your filing situation can ensure that the only turkey you'll encounter will be the perfectly cooked bird on your holiday dinner table.
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