December 2021 Tax Tips

It’s the most wonderful time of the tax year. The end of it!

December can be hectic. There are the holidays, which — COVID Omicron variant and safe pandemic practices willing — more families will celebrate in person this year.

On top of those plans, there are gifts to buy and cards to send and, of course, tax moves to make.

I know. Tax matters didn’t make it into your letter to Santa Claus.

But there are some potential tax-saving moves that must be made by Dec. 31. And as St. Nick’s unofficial tax elf, I’m here with December’s tax tips.

As noted, most of the pieces of December tax advice will highlight tax moves that have an end-of-year deadline.

But since 2022 also is on the horizon, this page of collected December tax tips will give you some ideas on how to deal with Internal Revenue Service responsibilities you’ll likely face in the upcoming New Year.

And since December is about holiday traditions, we continue our tax tip tradition of adding the tips to this page  as soon as they are highlighted in the upper right corner of the ol’ blog. That way you don’t have to worry if you miss one on its featured day. You can check all of them out via their links below.

OK, I hear you. You’ve got a lot to do, so let’s get to the ol’ blog’s December tax tips early present.

1. 6 tax moves to make this December — It’s December! That means in addition to holiday shopping, you need to make some time for year-end tax tasks. Here are six to get you started. (Dec. 1, 2021)
2. Picking the perfect tax pro — December is a great time to go shopping for a tax preparer who can help ensure next year’s tax return filing goes more smoothly. By picking the perfect tax professional before the coming tax season rush, you’ll be able to find an adviser meets your tax and financial tax needs. There’s also a December bonus. If you hire her or him this month, you can get some personal year-end tax tips! (Dec. 2, 2021)
3. Ways to spend your FSA funds — Some who have money in a tax-favored medical flexible spending account (FSA) must spend it by the end of the benefits year or lose it. In most cases, that’s by Dec. 31. Here are some suggested eligible medical expenditures that can help you zero out your FSA. (Dec. 8, 2021)
4. Tax-smart investment moves to make now — If you’re like most investors, your portfolio has a blend of holdings that have done well and not so well. In either case, some asset rebalancing moves could provide some tax benefits. (Dec. 13, 2021)
5. RMD deadline is Dec. 31, 2021 — If you’re in you’re a septuagenarian, you could be facing a Dec. 31 deadline. That’s the due date for annual required minimum distribution (RMD) from tax-deferred retirement accounts. (Dec. 15, 2021)
6. Tax deduction for philanthropic nonitemizers — If you give to a qualified charity and take the standard deduction, you still can claim a tax deduction of up to $300 (or $600 if you’re married and file jointly) directly on your Form 1040. But you must make your contribution by Dec. 31 in order to claim it on the federal return you file next year. (Dec. 17, 2021)
7. Last-minute financial gifts — With Christmas bearing down, are your panicking over what to buy those final few hard to shop for folks on your Christmas gift list? No worries. Say it with cash or stocks or various contributions to tax-favored accounts or charities. You’ll find those and more financial gifts, some with tax benefits for the giver and/or recipient, in these last-minute financial present possibilities. (Dec. 21, 2021)
8. MAGI has a tax, not just a Christmas, connection — One of my all-time favorite Christmas stories is O. Henry’s “Gift of the Magi.” It refers, of course, to the three wise men in the birth of Jesus tale. But there’s also a tax MAGI, and it’s the perfect season to read about it, too. (Dec. 23, 2021)
9. Still time to bunch tax deductions — There are only a few days left in 2021, but that’s still enough time to bunch expenses that are tax deductible into this tax year. If you need a few more Schedule A claims to make that itemized total larger than your standard deduction amount, here are some tips on bulking them up before tax year time runs out. (Dec. 27, 2021)
10. Tax moves to make by Dec. 31 — The race to make some tax-saving moves by Dec. 31 is entering the final lap. Be sure that by the time you cross the 2021 tax year finish line, you’ve made, or at least consider, these six year-end tax tasks. (Dec. 30, 2021)
11. Tax tips and rules for donating — If you’re still considering making a charitable gift for the 2021 tax year, know the Internal Revenue Service donation rules. And definitely check out whether the charity is naughty or nice. (Dec. 31, 2021)

It’s not Christmas at our house until the disembodied Santa head lights adorn our hearth. (K. Bell photo)

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We made it! This final month of the tax year obviously focuses on items with a Dec. 31 deadline, but there are moves you can make year-round. If you’re looking for more and earlier 2021 tax tips, you’ll find them in the monthly links below.

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