Top 10 Tax Planning Strategies

THE TAX ATTIC with Jerry Coon

December 22, 2011 // 0 Comments

Top 10 Tax Planning Strategies It’s nearing December 31. For most tax-planning strategies, December 31 is a hard deadline. I’m going to borrow from David Letterman and give you my Top 10 Action Tax Service Tax Planning Strategies. Since Herman Cain dropped out of the presidential race, I think it’s a fair bet that our current tax system is going to stay in place for the foreseeable future. Since our country is drowning in debt, I also think it’s a fair bet that after the presidential election, there will be major tax changes within that system. I believe those changes will result in tax increases. Our federal government will come to the same conclusion that was reached in the State of Michigan. In Michigan, Governor Snyder determined that balancing the budget with smoke and mirrors wouldn’t work anymore. Changes were made. Some of them are painful. At the federal level, continuing to print money isn’t the answer. It won’t work anymore and changes have to be made. Some of them will be painful. In the meantime, there are items we might consider between now and December 31. Here are my Top 10 planning considerations. 1. Make contributions to your favorite charities. Write the check by December 31 or go online and use a credit card to make the contribution. In order to ensure you get the deduction, get a receipt. As I stated in last week’s article, the great credits available on the Michigan return for homeless shelters/food banks, public TV/radio, museums/libraries, and community foundations are all eliminated as of January 1, 2012. Make those contributions before the stroke of midnight on the 31st to get the credit on this year’s tax return. 2. Consider paying real estate property taxes in 2011. If you itemize, paying them in this year may prove beneficial. If you make the payment on December 27, 2011 and you file your return on February 27, 2012, you realize a tax benefit 60 days after spending the money. However, if you make the payment on February 12, 2012 and your 2012 tax return is not filed until February 27, 2013, you will wait for an entire year to pass before you receive a tax benefit. Of course, if you don’t itemize […]