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Checklist of things to do before the end of 2011.

There are many tax-saving steps that can be taken before the end of this year. Here is a list of the most important actions that should be taken no later than Dec. 31, 2011 to save taxes:

... Realize losses on stock while substantially preserving investment position,

... Convert investment income taxable at regular rates (e.g., interest income) into qualifying dividend income,

... Arrange with employer to defer bonus until 2012,

... Increase basis in S corporation or partnership to make possible a 2011 loss deduction,

... Use credit card to prepay expenses,

... Make energy saving improvements to your home that qualify for tax credits in 2011,

... Pay contested taxes to deduct them this year while continuing to contest them next year,

... Put equipment in service before year-end to qualify for the 100% bonus first-year depreciation allowance,

... Make expenditures qualifying for the $500,000 business property expensing election,

... Settle insurance or damage claim if this will maximize casualty loss deduction,

... Apply bunching strategy to “miscellaneous” itemized deductions, medical expenses, and other itemized deductions to increase deductible amounts.

... Increase withholding to eliminate or reduce estimated tax penalty,

... Set up self-employed retirement plan,

... Make gifts taking advantage of the $13,000 gift tax exclusion,

... Watch out for marriage penalty in regard to year-end marriage or divorce plans,

... Consider deferring a debt cancellation event until 2012,

... Decide whether to elect to deduct investment interest against capital gains and/or qualified dividends, see  .

... Avoid personal holding company tax by making dividend payments,

... Take steps to avoid or minimize income tax on Social Security benefits,

... Structure real estate deal to avoid paying interest on tax deferred under installment method,

... Step up level of participation in business activity to meet material participation standard under passive loss rules,

... Dispose of passive activity to free up suspended losses,

... Ask employer to increase withholding of state and local taxes to pull the deduction of those taxes into 2011,

... Extend subscriptions to professional journals, pay union or professional dues, enroll in (and pay tuition for) job-related courses, etc., to bunch into 2011 miscellaneous itemized deductions subject to the 2%-of-AGI floor,

... Accelerate a big ticket purchase (such as a boat or car) into 2011 to qualify (if the taxpayer itemizes) for state and local sales tax deductions instead of state and local income taxes;