December to-do list: shopping, family visits and tax tasks
Monday, December 01, 2014
Ho! Ho! Ho! Holy Moly! It's December already!
The song is wrong, or at least incomplete. It may well be the most wonderful time of the year, but it's also the busiest. I don't know about you, but busy and wonderful isn't always (or usually) a good convergence.
Unfortunately, there's very little we can do about it this year, especially since Thanksgiving fell late in November. Things right now are even more crunched, what with more shopping, holiday parties, and getting ready to visit relatives or host them at your home, all the while trying to shoehorn in some work.
And I really do hate to add to the urgency of the season … deep breath … but December is also an important tax month.
You have just 31 days to take care of some tax-saving tasks. Fewer, actually, when you consider some actions must be made on business days.
So with the time ticking away -- literally over there in the ol' blog's right column -- here are some December Tax Moves you might want to consider.
Review your portfolio: Overall, 2014 has been a banner year for stocks. But the market did take a couple of dives during the year. Whether you sold some assets when the investing roller coaster was at the top of the track or plummeting down the rail, you have tax options.
For most folks, long-term gains are taxed at a lower rate, either 15 percent or 20 percent. But your stock losers also can pay off at tax time by offsetting your gains, or at least some of them, and reducing your overall tax bill. Or maybe you just want to sell some profitable stocks to reset an asset's basis at a new higher level.
Whatever your investment goal and strategy, review your portfolio now. Any moves for the 2014 tax year must be made by Dec. 31.
Be charitable: You might find you have some holdings that have done well, but no longer fit your investment strategy but you're not too keen on paying taxes on the gain. Give the appreciated stock to charity. Most nonprofits will take these types of donations and you get a charitable itemized tax deduction for the value of the asset when it's donated, as long as you've held it for more than a year.
That's just one of several atypical charitable donations. You also can give a vehicle (car, boat, or other motorized vehicle) to charity, buy supplies or other needed items for a nonprofit, use your vehicle to do volunteer work for your favorite charity and deduct that mileage and even give tax-deductible money to Uncle Sam to help reduce the public debt.
Regardless of how and what you give, be sure to follow the Internal Revenue Service rules on charitable donations.
Take care of home tax maintenance: You've decked your halls. Now make sure your magnificently decorated home pays off not only in holiday cheer, but also at tax time.
Pay you January mortgage payment in December, that way you'll have extra interest you can deduct. Do the same with your property taxes that, if they're like ours, aren't officially due until early next year. Then you can also write off that local real estate tax payment as an itemized deduction.
OK, that's enough … for now. But you can find many more December 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 rapidly dwindling hours left in 2014.
Again, I know taxes aren't at the top of your many holiday season lists, but try to make some time for some of these tax-cutting options. They just could turn out to be a holiday present to yourself that pays off when you file your taxes next spring.
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