That April 15 deadline creates a great deal of stress for many people, so it makes sense to get started now on your taxes. In fact, planning ahead may even lower your stress level. Starting early also allows more time for you to do your homework and become aware of changes to cost-basis reporting rules and how they may impact the various stocks or bonds you may own.
So put the Christmas shopping list away and review the tax tips here to assist you in planning ahead. These key tax strategies, offered from Charles Schwab, may help you keep more of your income and boost your after-tax returns.
— By CNBC's Jim Pavia, senior editor at large
Posted 1 December 2015
1. Always double-check your tax withholdings. Okay, of course you want to pay the IRS its due, but why give a dime more than you have to, right? Make sure you're not having too much (or too little) taken out of each paycheck. The same holds true if you make quarterly estimated tax payments.
2. Consolidate debt. Consider replacing credit card debt, which generally has a high interest rate, with a lower-rate, tax-deductible home equity loan or line of credit.
3. Account for any refinancing. If you lowered your mortgage interest rate in the past year, you may now have a lower-interest deduction. Also, if you used any of the proceeds for something other than physical improvements to your home, that amount may be subject to the alternative minimum tax (AMT). Remember that points paid in a prior refinancing that you haven't already deducted can be deducted the year you refinance again.
4. Prepay quarterly estimated state tax payments. Consider paying your fourth-quarter 2015 estimated state income taxes and any outstanding balance by Dec. 31. Your payments will be tax deductible for the 2015 tax year if you're not subject to the AMT.
5. Prepay property taxes. Many counties bill taxpayers twice, in November and February. If you pay your February installment by Dec. 31, you can take it as a deduction on your 2015 return. Again, watch out for the AMT, which disallows these deductions.