A couple December reminders for tax- conscious home owners.
With 2011 ending in three weeks, we're in the stretch for finding ways to reduce our income tax burden. Home owners who deduct interest charged on their home loans may want to make the January payment a few days early to credit the payment in 2011 and have the advantage of deducting the additional interest this year. It may be a little strategic fortune telling because the deduction could be worth more in 2012 if tax rates increase. It's also possible that home interest will be treated differently in 2012, depending on what decisions/indecisions come out of Congress next year. I'm going to take the bird in the hand and pay early enough to get the interest credited this year.
Another consideration is the energy saving tax credit. Although some of the credit will remain beyond this year, there is a substantial part that will end on December 31. If you're planning on replacing or upgrading HVAC, windows, doors, roof, water heater, or insulation, there are credits available that will expire soon. You can check the Energy Star website for details.
If you have a tax adviser, now is your last chance to have a 2011 tax planning consultation. If you're like I am, you have memories of at least one March consultation when you learned everything you should have done before year end. This is not a good month for procrastination.