Only 11 Days Left for 2016 Tax Deductions
Article Highlights: - Actions You Can Still Take To Reduce Your 2016 Tax Bite
- Actions Must Be Completed Before The End of 2016
- When Contributions by Check, Text-message or Pay-By-Phone Accounts Are Considered To Be Made
- Deductible Expenses Paid By Credit Card Are Deductible In The Year Charged
That still gives you time to make charitable contributions, pay deductible taxes, and make business acquisitions before year-end. However, making a last-minute purchase of business equipment isn’t enough to be able to deduct the cost of the equipment – you also must place that equipment into service before year’s end. This means you can’t take a deduction on your 2016 return if you take delivery of the equipment after the end of the year, even if you paid for the item in 2016.
A charitable contribution to a qualified organization is considered made at the time of its unconditional delivery, which, for donations made by check, is the date you mail it. Contributions you make by text message are deductible in the year you send the text message if the contribution is charged to your telephone or wireless account. If you use a pay-by-phone account, the date the financial institution pays the amount is considered the date you made the contribution.
If you pay your taxes by check and your financial institution honors the check, the day you mail or deliver the check is the date of payment. If you use a pay-by-phone account (such as electronic funds withdrawal), the date reported on the statement of the financial institution showing when payment was made is the date of the tax payment.
Purchases, tax payments or contributions charged to your credit card are deemed purchased when the charge is made, regardless of when you pay the credit card company.
Wishing you a happy New Year and looking forward to assisting you with your tax preparation needs during the coming tax season.
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