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Dec. 31: A red-letter tax day

December 27, 2007

Dec31_tax_deadline_day_2
2007 is fast disappearing. That means you have just a few days to make some must-do tax moves.

Luckily for us taxpayers, the calendar gods have given us an extra business day this year. Dec. 31, the last day to make many moves that could cut your tax bill, falls on Monday.

So let’s not waste any more time!

Start with charitable donations. You’ve got to make them by Dec. 31 in order to claim them on your upcoming Form 1040, Schedule A.

That’s also the final day to make any changes to your investment portfolio
and have the results affect your 2007 return. If you are
expecting lots of taxable unearned income, you can offset that amount
by selling some assets that have declined in value.

Or you can combine investing and philanthropy and donate appreciated stocks to your favorite charity. This story on atypical giving options has more details on this (and other) ways to contribute beyond simply writing a check.


Make your Jan. 1 mortgage payment by the end of December in order to deduct the interest against this year’s income.

The sales tax deduction is still available, and any tax on a motorized vehicle you buy by the end of the year can be added to the tax tables the IRS provides.

You can wring extra tax savings out of an auto purchase if you opt for a hybrid. The tax credit for these fuel-efficient vehicles continues for most makes, but to get the full tax value for a Honda hybrid, you must drive one off the the lot by Dec. 31.

More year-end moves: A couple of weeks ago, I blogged on this very subject here, but it’s always worth a repeat when it comes to actions that will help you cut your 2007 tax bill.

This Bankrate story also has my top 10 year-end tax moves. And last week I did an interview on NPR’s Morning Edition (click here for the audio link) on the topic.

My fellow tax blogger William Perez at About.com: Tax Planning suggests a dozen tax moves to make by Dec. 31.

And Kiplinger comes up with 15 ways to reduce your 2007 tax bill if you act quickly.

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The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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