All I want for Christmas is a fiscal cliff deal. Silent night as tax talks between Congress and the president stall. I'll have a blue Christmas without some tax rate agreement.
Yes, as those fake seasonal song lyrics indicate, it's looking to be a less than jolly holiday season. The passage of each December day without a tax and spending agreement on Capitol Hill brings us closer to the Jan. 1, 2013, convergence of financial deadlines that could mean higher taxes for us all.
I believe Congress and Obama will strike a deal. But then I still believe in Santa Claus.
And while folks in D.C. fight about fiscal cliff solutions, you and I are left with the final days of the year to make some tax moves that could lower our 2012 tax bills.
Of course, the legislative uncertainty makes our choices even more difficult than usual.
More than 70 tax extenders, those technically temporary but usually, uh, extended, tax breaks for businesses and individuals officially expired on Dec. 31, 2011. Just which ones — such as the itemized deduction for state and local sales taxes and above-the-line deductions for tuition and fees and educators' out-of-pocket classroom expenses — might be resurrected for 2012 filing purposes is unclear.
And, of course, there is the already (and continually) mentioned fiscal cliff. Since we don't yet know how our taxes will be affected by a Congressional deal, some of us will find that traditional year-end tax planning moves might not work this December.
Others, however, are still valid regardless of the fiscal cliff's resolution.
You can spend down your flexible saving account (FSA) so you won't lose any leftover money, drop off charitable donations and get to your payroll office and submit a new W-4 to adjust your withholding if it looks like you're going to owe Uncle Sam with your 2012 return.
After that, things get a little more difficult.
Take the usually straightforward year-end examination of your portfolio. You might want to give extra consideration to selling appreciated stock this year if you think the capital gains tax
rate might go up in 2013.
And instead of the deferring income, if you make a nice sum of money you might want to shift as much as you can into 2012 since most folks expect higher income earners to face higher tax rates next year.
These are just a couple of the December Tax Moves detailed over in the ol' blog's left column. For more just scroll down a bit.
Yes, it's a long collection. But you need to add a few of the tax tasks to your equally lengthy holiday to-do list. They just might help you save enough money to pay for all those gifts you plan to purchase.
