Most years you want to accelerate your deductions and push off income into the next year, at least that’s true when we come down to the final days of the year. Waiting or accelerating just a couple of weeks can give you a whole extra year to pay the tax.
But what do you do this year? Are your taxes going up? The answer is – nobody knows. There are new taxes coming down the road due to the Health Care bill, but most of those don’t hit until 2014.
There is talk that the Bush Tax Cuts will be extended after all. But again, who knows? Is it going to happen?
So what does this all have to do with your state estimated tax payments? One of the easiest ways to get a federal tax deduction in a year is to simply pay your state estimated tax payment due 1/15 in December of the year before.
If you and your tax advisor decide that you want to accelerate deductions into 2010, then don’t forget about simply paying your state estimated tax payments early.