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PrintSpecial Report: Deadline for Deductions
Michael Papile, Milton Taxpayer
"When you're planning your taxes, you're looking backwards, this year we made a conscious effort to look forward."
Mike Papile of Milton is actually looking forward to tax time. By paying real estate taxes in advance and donating to charity before year's end, this father of three says he's increased his 2004 tax deductions by 20%.
Michael Papile, Milton Taxpayer
"I feel good we understand what our position is before April 15th. Where in years past we've just keep our fingers crossed and see where we've ended up."
For homeowners, like Mike, experts say consider pre-paying January's mortgage payment before December 31st.
Lauren Gadkowski, Beacon Financial Planning
"It's one of those things not too many people know about.
If you want an even bigger benefit, February's property tax can be paid early too.
Lauren Gadkowski, Beacon Financial Planning
"You might want to front load a lot of those payments for 2004 to give yourself a favorable tax return for the 2004 year."Barry Chait, Parent, McLaughlin & Nangle CPA
"When we say pre-pay taxes, you always want to consult your financial advisor, because what may be seen as a deduction for one, might not be a deduction for another."
Because of changes in the tax code recently signed by President Bush, experts say you really should plan before the end of the year.
For instance, this year, taxpayers can choose to deduct all their state sales taxes, or their state income taxes - whichever is higher.
Barry Chait, Parent, McLaughlin & Nangle CPA
"If you purchase a new SUV that you'll use personally, that's 5% tax. New appliances in your house, whatever else you may have bought in the course of a year."
Thinking of donating a car to charity? This year, you could write off the car's fair market value. After December 31, your tax deduction will equal the amount the charity sold your car for. the difference could be huge.
Lauren Gadkowski, Beacon Financial Planning
"That may make you re-think. Maybe they want to give it away now, or maybe it would be better for them to sell."
Another option before the 31st, sign up for your employer's flexible spending account. It can be used for all health or daycare expenses.
Lauren Gadkowski, Beacon Financial Planning
"It's another great way to reduce your taxable income, so take advantage of the FSA - the flexible spending account."
Even with proper planning, no one will know their exact savings until all the paperwork is in.
Michael Papile, Milton Taxpayer
"Hopefully it will result in a lower tax bill for the year. What that will be, we don't know yet."
One thing that's certain- taking time to plan your taxes year-round could pay off.
For more information:
http://www.pmn.com/home.asp
http://www.beaconfinancialplanning.com/