Tax Planning for 2012
BOSTON (CBS) - There are five days left in this year to right any wrongs so we can start with a clean slate. And there is still time to do a little tax planning. I can always find time to save money.
Taxes will always be here. Taxes are the price we pay for a civilized society.
If you pay estimated taxes they are due on January 15th of 2013. But you can prepay your Massachusetts estimated taxes this week and get the deduction for 2012. But if you got caught in the AMT last year check with your accountant before paying them early.
It's not too late to make a donation to your favorite charity. You can write them out a check and send it off or give them your credit card number and either way you'll get the deduction for this year. Use a credit card with frequent flyer miles or a rebate program. That way you'll be rewarded for doing good a thing.
If you have this week off, think about cleaning out closets or the attic. I hear you, I know its a vacation week, but its cold out and you are tired of the stores and the kids need something constructive to do away from their games. Get some good packing boxes and start getting rid of the stuff that is cluttering up your house.
We have a policy if we get something new, something old has to go to make room for it. So the Goodwill always gets lots of good stuff the week after Christmas from us.
Make a trip to a drop off center at the Goodwill or the Salvation Army. Get it there this year and the deduction will be for this year. Remember to get a receipt and be reasonable with the estimated value of the items you are dropping off.
IRS regs state that you can no longer claim deductions for used clothing and household goods that are not in "good" condition or better. It should be clean, no holes, not smelly and not needing repair. And it should be something the charities can sell in their stores. If you wouldn't give it to a friend don't give it to the charities! Just pitch it.
Use the Goodwill's or Salvation Army's website to get a list of suggested deduction amounts.
Small businesses. Take the time to review your Profit and Loss statement. If it's been a profitable year you can still do some planning. Consider doing some retirement planning. Set up a Simplified Employee Pension Plan, a SEP-IRA. If you use a SEP you will need to include your employees in the plan as well.
