April 15. That’s the date most taxpayers think of as their federal tax deadline.
However, the best date for a taxpayer to focus on is December 31. Why? You always can file an extension to avoid the April 15 deadline; but you can’t move the end of your tax year.
Once December 31 passes, your taxable income, deductions, credits and tax liability for the year are all “set in concrete” with little if any opportunity to change the outcome. As a result, year-end tax planning should form an essential part of your financial strategy. Changes brought about during this year, and forecasts for 2010, make that advice even more compelling for year-end 2009.
Effective year-end tax planning for 2009 combines use of traditional techniques of acceleration and deferral of income/deductions with appropriate responses to a constantly changing tax landscape. Below are various topics that you may want to consider for year-end planning.