3 Ways to Spend Wisely in December

While in the mode of holiday shopping, consider these 3 tax-smart purchases.

Make Charitable Contributions

Consider making charitable contributions before year-end both to obtain the maximum tax deduction and to fulfill any charitable programs or commitments you may have established for the year.

Pay Tax-Deductible Expenses

Consider paying tax-deductible expenses prior to year-end. Some common examples are real estate taxes, quarterly state or local income taxes, investment-related expenses, and dues. These must be paid by December 31 to obtain a deduction this year. Please call us if you’d like to discuss these deductions further.

Buy a New Car

If you need a new car, now is a great time to purchase or lease one. Frequently, dealers are anxious to clear out last year’s inventory prior to year-end. In making your choice, consider the federal tax (and occasional state tax) advantages for buying fuel-efficient vehicles such as plug-in hybrids and electric vehicles.

Evaluate Your Spending Plan

If you’re one of the rare few who are disciplined enough to create and hold yourself to a budget, December is a great time to evaluate how close your spending went compared to plan for the year. You’ll learn lessons from the areas you overspent that will help you create an even better plan for 2013.

For the rest of us mere mortals, recalculate your net worth. Compare it to the value at the beginning of the year. How did you do?

This entry was posted in Accounting, Cost-Savings Tips, Decision-Making Tips, Expense Reduction Tips, General Tips & Tricks, Individual Taxes. Bookmark the permalink.

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