Tax Prep To Do Before The New Year

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• Last Chance For End Of Year Tax Deductions

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  It’s the end of the year, and a perfect time to start preparing for your 2016 income taxes. The big question, according to tax expert Mary Mellem, is to consider the advantages to itemizing rather than taking a standard deduction.

  “The standard deduction this year for a married couple is $12,600, so if you’re itemized deductions are greater than that, it is to your advantage to take the greater number,” said Mellem, who runs Ashwaubenon Tax Professionals.

  You need to do some figuring, she said, as it all depends on individual situations, but typically owning a home, having a mortgage and paying property taxes make you a good candidate.

  Here are some things to consider when considering itemizing:

  • As long as you itemize your deductions, your property taxes can be a tax deduction on your federal and state income taxes. And even if you don’t itemize, you can still take the deduction on your state taxes in Wisconsin, Mellem said.
  • It is important if you’re going to make charitable contributions, that you get them in by Dec. 31, and that you get an acknowledgement of that donation before you file your tax returns. “That could mean giving cash, making credit card payments, or it could mean cleaning the closets and getting them over to one of the charitable organizations that accepts used goods,” Mellem said.
  • Remember if you’re doing the used goods, it’s important to get a receipt from the organization as well as keeping a list with that of the items that you have given. “(The) IRS is very touchy about charitable contributions … and without proper documentation, upon audit, they will disallow those donations. So it is so important to do that,” she said.

  Mellem said although contributions for deductions are required by Dec. 31, you can make IRA contributions and Health Savings Account contributions as late as April 15.