Thursday, December 3, 2015

Timing Your Itemized Deductions

By Thomas D. Hammerschmidt Jr.

Timing your itemized deductions might save you federal income taxes.

If your eligible itemized deductions each year (e.g., home mortgage interest, property and state income taxes, and charitable contributions) are close to the standard deduction amount, you might be able to “shift” your deductions between tax years and lower your taxes.

For example, timing your significant charitable contributions and delaying the payment of winter property taxes to the next calendar year would enable you to deduct three property tax payments in one year. In other words, lump as many deductible payments as you can in one calendar year to claim the higher itemized deductions, and then claim the standard deduction in the in-between years when your deductions are lower.

For more information, call Tom Hammerschmidt in our Ann Arbor, Mich. office at 734-623-1602.