But as we get down to the end of the year, there can be some grey area as to when something has been ‘paid’ and when it hasn’t.
Here are some rules to follow:
· A check needs to be mailed before year-end to make sure you’ve got the deduction. It doesn’t need to be cashed by the recipient before year end.
· If you use a retail store credit card, you can only take a deduction in the year in which you pay a bill. So, for example, if you go to Home Depot and buy shelving units for your office and use a Home Depot credit card, it won’t be deductible until you pay the Home Depot bill.
· If you use a bank credit card, you can take a deduction in the year in which you make the charge. It doesn’t matter when you pay the bill.
Now is the time to be strategic with your deductions. Plan ahead to pay less tax. If we can help, give my husband Richard a call at 888-592-4769.
Tags: 2012 tax planning • Tax deductions • year end tax planning