December 1 – Time for Year-End Tax Planning
December is the month to take final actions that can affect your tax result for 2011. Taxpayers with substantial increases or decreases in income, changes in marital status or dependent status, and those who sold property during 2011 should call for a tax planning consultation appointment.
December 10 – Report Tips to Employer
If you are an employee who works for tips and received more than $20 in tips during November, you are required to report them to your employer on IRS Form 4070 no later than December 12. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.
December 30 – Last Day to Make Mandatory IRA Withdrawals
Last day to withdraw funds from a Traditional IRA Account and avoid a penalty if you turned age 70½ before 2011. December 31 is the actual last day to make a withdrawal. However, December 31 falls on a Saturday in 2011, and IRA trustees and custodians may not be open for business that day. Thus in most cases December 30 will be the actual last day of 2011 to make withdrawals.
December 31 Last Day to Pay Deductible Expenses for 2011
Last day to pay deductible expenses for the 2011 return (doesn’t apply to IRA, SEP or Keogh contributions, all of which can be made after December 31, 2011). Taxpayers who are making state estimated payments may find it advantageous to prepay the January state estimated tax payment in December (Please call the office for more information).
31 Caution! Last Day of the Year
If the actions you wish to take cannot be completed on the 31st or a single day, you should consider taking action earlier than December 31st.