Phil's Personal Finance Tip of the Day:
12 Year-End Tax Moves for 2012
By Jill Schlesinger | CBS MoneyWatch – Tue, Dec 18, 2012 12:06 PM EST
Is the so-called "fiscal cliff" throwing a wrench in your 2013 planning? Don't despair -- there are tried and true year-end moves to make now, which can help lower your tax bill in April. While you may need to make some assumptions to prepare for various what-if scenarios, the fiscal cliff actually may present interesting opportunities for some taxpayers.
"A little planning can go a long way," according to Michael Goodman, CPA/PFS, CFP and president of Wealthstream Advisors, but he cautions that investors be careful not to let the tax tail wag the investment dog. "You need to make a decision about whether you are holding certain positions for the long haul. The uncertainty surrounding the fiscal cliff should encourage you to determine your specific goals and then create a plan to help you get there."
As you put that plan together, take advantage of these 12 tax tips for 2012:
1. Mail your checks for deductible purchases: Procrastinator alert! If you're the type of person who waits until the last minute for everything, take note: To qualify for write-offs of charitable contributions and business expenses, your payments must be postmarked by midnight Dec. 31. The IRS says just writing "December 31" on the check does not automatically qualify you for a deduction; and pledges aren't deductible until paid. Donations made with a credit card are deductible as of the date the account is charged.
2. Give appreciated stock or fund shares to charity: Get in the holiday spirit, with the help of Uncle Sam. One way to lower your tax bill in April is to donate appreciated securities, like stocks, bonds or mutual funds to a charity. You'll write off the current market value (not just what you paid for them) and escape taxes on the accumulated gains. There is no overall limit on itemized deductions for 2012. For 2013, the overall limit on itemized deductions is scheduled to be reinstated and fiscal cliff negotiations may put further deductions in place.
To read the entire article from Jill Schlesinger | CBS MoneyWatch:
"A little planning can go a long way," according to Michael Goodman, CPA/PFS, CFP and president of Wealthstream Advisors, but he cautions that investors be careful not to let the tax tail wag the investment dog. "You need to make a decision about whether you are holding certain positions for the long haul. The uncertainty surrounding the fiscal cliff should encourage you to determine your specific goals and then create a plan to help you get there."
As you put that plan together, take advantage of these 12 tax tips for 2012:
1. Mail your checks for deductible purchases: Procrastinator alert! If you're the type of person who waits until the last minute for everything, take note: To qualify for write-offs of charitable contributions and business expenses, your payments must be postmarked by midnight Dec. 31. The IRS says just writing "December 31" on the check does not automatically qualify you for a deduction; and pledges aren't deductible until paid. Donations made with a credit card are deductible as of the date the account is charged.
2. Give appreciated stock or fund shares to charity: Get in the holiday spirit, with the help of Uncle Sam. One way to lower your tax bill in April is to donate appreciated securities, like stocks, bonds or mutual funds to a charity. You'll write off the current market value (not just what you paid for them) and escape taxes on the accumulated gains. There is no overall limit on itemized deductions for 2012. For 2013, the overall limit on itemized deductions is scheduled to be reinstated and fiscal cliff negotiations may put further deductions in place.
To read the entire article from Jill Schlesinger | CBS MoneyWatch:
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