STILL TIME: Contributions, payments now can affect April tax bill

Published 1:35 am Thursday, December 29, 2016

As the clock ticks ever onward toward 2017, it’s almost time to begin thinking about the January task of compiling tax information.

And it’s not quite too late to take actions that could affect what you’ll owe the IRS in April.

For most taxpayers, Dec. 31 is the last day to take actions that will impact their 2016 tax returns, according to tips provided by the IRS.

  • For example, charitable contributions are deductible in the year made. Donations charged to a credit card before the end of 2016 count for the 2016 tax year, even if the bill isn’t paid until 2017. Checks to a charity count for 2016 as long as they are mailed by the last day of the year.

For a list of local charities and their addresses, click here.

  • Another tax-saving tip provided by area accountants in years past is to make your January mortgage payment by Dec. 31. An extra mortgage payment could increase itemized deductions with the additional interest paid, but would need to be received and posted to your account by the mortgage company before year end so it will be reported as paid in 2016 on the form 1098 mortgage interest statement
  • Most workplace retirement account contributions should be made by the end of the year, but taxpayers can make 2016 IRA contributions until April 18, 2017, according to the IRS. For 2016, the limit for a 401(k) is $18,000. For traditional and Roth IRAs, the limit is $6,500 if age 50 or older and up to $15,500 for a Simple IRA for age 50 or older.