It's the most wonderful time of the tax year. The end of it!
December can be hectic. There are the holidays, with more families this year celebrating in person now that the COVID pandemic has eased a bit.
On top of those plans, which involve the always crazy travel and accommodations (just how many cousins can safely and sanely share one guest room?), there are gifts to buy and cards to send and, of course, tax moves to make.
I know. Tax matters didn't make it into your letter to Santa Claus. It's probably just as well. I love the Big Guy, but unless he's even more magical than I think, there's no way St. Nick can deliver a festively wrapped, already prepared tax return for you on Dec. 24.
But there are some potential tax-saving moves that must be made by Dec. 31. As Santa's unofficial, self-appointed tax elf, I'm here with December's tax tips.
Year-end, New Year tips meet: Most of the tips obviously will focus on what must be done by year-end. But you'll also find some ideas on how to deal with Internal Revenue Service responsibilities you'll likely face in the upcoming New Year.
And since December is about holiday traditions, we continue our tax tip practice of adding the advice to this page as soon as it's been highlighted in the upper right corner of the ol' blog. That way you don't have to worry if you miss one on its featured day. You can check all of them out via their links below.
OK, I hear you. You've been reading the ol' blog and checked tax tips on their monthly pages all year. You know the drill.
And you've got a lot to do.
So, without further ado — except maybe for an adieu to 2022 as we near Dec. 31 (sorry, not sorry for the homophonic pun) — let's get to the December tax tips.
- Holiday shopping (and tax time) security tips — Yes, you did see this tip in November. But since we're now in the heart of the holiday shopping season, it deserves a reprise in December. Most of us are online most of the time, but our connectivity increases during the holidays. And at tax filing time. That's why the IRS Security Summit has some online shopping and tax filing tips to help secure and protect your identity (and money!) from con artists and other criminals. (Dec. 1, 2022)
- Tax moves to make this December — Ho, ho, here's an early tax Christmas present: 8 tax moves to make this December! If you take the tax steps that are relevant to your situation sooner in the month, you'll not only save tax dollars, but also free up time for more traditional festivities. (Dec. 2, 2022)
- Taxes on severance pay — Losing your job is never easy, but a layoff severance package can help. Note, though, the out-the-door amount is taxable income. (Dec. 5, 2022)
- Don't miss contractor vs. employee rule change comment deadline — Classifying a worker as an employee or contractors has tax (and more) implications for the individual and company. The Biden Administration wants to tweak current employee-contractor rules, and is accepting public comment on the proposed changes through Dec. 13. If you have any thoughts on this, let Uncle Sam know now! (Dec. 9, 2022)
- Use, don't lose, your FSA funds — Medical flexible spending accounts, usually referred to by their FSA acronym, are a great tax-advantaged way to pay for out-of-pocket medical costs. But they can turn into a turkey if you don't use the funds in time and your employer gets to keep your account's balance. Don't make that mistake, especially if your spending deadline is Dec. 31. Check out these ways use so you don't lose your FSA money. (Dec. 14, 2022)
- Reporting tip income, during the holidays and year-round — If you get gratuities as part of your job, you probably get a larger portion this month, as folks tend to be more generous during the year-end holidays. That added cash is nice, but it's also taxable income. Here's a brief refresher on tips and taxes. (Dec. 16, 2022)
- Ho! Ho! Holiday bonus (and tax) time — You're getting a cash bonus from your boss. Yay! But that added compensation is taxable income. Boo! Here's a look at the tax implications of year-end holiday bonuses. (Dec. 19, 2022)
- Preparing for an IRS audit — The Internal Revenue Service is supposed to audit every president's tax returns each year. Somehow, though, Donald J. Trump got, uh, lucky. Just in case you're not that fortunate when it comes to the IRS' prying eyes, here are some tips on preparing for a possible IRS tax audit. (Dec. 21, 2022)
- Bunch your itemized expenses — There's not a bunch of time left in 2022, but enough to look into bunching itemized tax-deductible expenses. This deduction strategy essentially means alternating each year between your standard or itemized deduction amount. To get a Schedule A total that's larger than your allowable standard deduction, you'll have to pull your itemized expenses into one tax year, or push them into the next, aka bunch them! It takes some planning, calculating, and guesstimating, but when it works, it maximizes all those itemized amounts (and receipts) that are too often lost because they're just not quite enough to claim. (Dec. 23, 2022)
- Alternative charitable donation ideas for Boxing Day giving — Boxing Day, the day after Christmas, is not a formal or generally celebrated holiday in the United States. But you can use this otherwise global tradition that keeps the holiday giving going by donating to your favorite charities. Here's a look at 5 tax-smart ways to donate other than just writing a potentially tax-deductible check. (Dec. 26, 2022)
- Last-minute RMD tips — Are you facing a required minimum distribution on a tax-deferred retirement account? Don't let all your holiday festivities distract you from meeting this annual Dec. 31 deadline, which this year actually is, in most cases, Friday, Dec. 30, since it's the last business day of the year. If you don't take your RMD, you'll face a stiff tax penalty. (Dec. 28, 2022)
- Year-end charity donation tips — 2022 is almost over, but you still have time these last few hours to make year-end donations that have double payoffs. Your philanthropy can help the receiving charities now. Then as a donor who itemizes, you can claim your gifts at tax-filing time next year. (Dec. 30, 2022)
*****
Hallelujah! We made it! 2022 and its tax concerns finally are over.
Or are they?
Sometimes deadlines slip. Sometimes they're extended because of things like major natural disasters. If you're still facing some filing tasks, check out these and the other 2022 filing season tips already posted in the preceding 11 months.
| January | July |
| February | August |
| March | September |
| April | October |
| May | November |
| June | December |
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