Getting Ready for Next Year Part 1

The end of the year is upon us and there are a few simple things we can do to make the best of these last few days. As a CPA taxes are always in my mind, April 15th is never far off. For these next few days here are a few things you can do to maximize your deductions and minimize your taxes:

  • Make sure your property taxes for this year have been paid. This may involve contacting your mortgage company and making sure they have paid this bill for you. Or like in our case, even though we have an escrow account our mortgage company sends us a check to hand over to the local property tax office. We’ve had this check for a few days now so we need to head to the local office and pay the taxes before the year is over.
  • Pay your December mortgage payment before December 31st. We usually pay our mortgage on the 1st of every month. Not this month, I want to make sure I am able to deduct the interest I paid on my mortgage this month on next year’s tax submission.
  • The holidays are the time of giving, how about getting some benefit from it? Consider cleaning up your closets and de-cluttering your house. Take any clothing or furniture donations to your local Salvation Army and Good Will and don’t forget to ask for a receipt. The IRS now requires receipts on donations of $250 or more.
  • Don’t leave any money on the table: check the balance you may have available in your Flexible Spending Account and make sure you use it. It’s cold season, so maybe a trip to your local pharmacy to stock up on cold medicine is in order. Check here for items you can buy using FSA dollars.
  • Did you get a nice Holiday bonus? or maybe cash gifts? Then consider sheltering that money from taxes and making a contribution to an IRA. You actually have until April 15th to make contributions to IRAs for the year 2007. But if you have the money now don’t be tempted to spend it and invest it on your future instead.

These are just simple things you can do to make the pain of paying taxes next year less.