Even though it's the last day of 2004, diligent taxpayers can do a few things to mitigate the pain in April.
But they'd better hurry. Only hours are left for donating used goods to charities, selling off the dogs in their stock portfolios so they can write off losses, or prepaying medical expenses to get last-minute deductions.
And small-business owners and the self-employed will have to act quickly if they want to get a tax-deductible retirement plan rolling by year-end or buy some equipment or office furniture to take advantage of liberalized one-time "expensing" rules.
Judging by traffic at thrift stores, charitable organizations' headquarters, and county government buildings, thousands of Toledo-area taxpayers have been hard at work in recent weeks to nail down their deductions.
Among the most popular last-minute tax maneuvers is donating household wares, clothing, appliances, and even autos to charitable groups.
"This is a huge time of year for us," said Bob Huber, president of Goodwill Industries. "Historically this is a very good time for us. It allows us to fill our stocks for the coming quarter."
Goodwill stores and collection centers will be open today, some until 8 p.m., to accept donations, as will Salvation Army stores until 9 p.m., and the St. Vincent de Paul Society store until 4 p.m.
Spokesmen for the charities say they have taken in dozens of donated cars, recreational vehicles, and boats in recent weeks because taxpayers are taking advantage of a window of opportunity: Until the end of 2004, they can deduct the "blue book" value of their vehicles, but after the first of the year, they can deduct only the price for which the charity sells the vehicle.
Among those accepting cars or titles today are Volunteers of America, on Champlain Street; all Goodwill stores; and the St. Vincent de Paul store on Washington Street.
The Salvation Army's warehouse on Moorish Avenue, which normally accepts vehicles, is closed today, said Capt. Harry McElwee, who heads the Adult Rehabilitation Center. He added that the agency has more than 30 vehicles in stock.
"Unfortunately, a lot of people think about taxes at the last minute," said Andy Mahler, a Maumee certified public accountant. But even the procrastinators can get some relief.
Experts note that stocks traded today count for tax purposes, so any capital losses can offset capital gains. Some losses can be deducted even if there are no capital gains to offset.
School teachers and counselors can load up on supplies and classroom materials today, to get deductions of up to $250.
Last-minute charitable contributions will be deductible on Schedule A of IRS Form 1040 if the check goes in the mail today and gets postmarked, said an IRS spokesman.
But prepayment of real-estate taxes by mail is a gray area. Even though most accountants say writing and mailing a check today probably would qualify as a deduction, an IRS spokesman said it may not hold up under an audit because the bill technically would be paid in the new year.
County treasurers' offices are closed today, but those offices in Lucas and Wood counties each reported at least 1,000 prepayments in recent days.
Some other last-minute tactics include using credit cards to make deductible payments even though the cost won't be paid until next year, and making "catch-up" contributions to a 401(k) account.
Experts urge taxpayers to consider whether any last-ditch deductions will put them at risk for the alternative minimum tax - a mechanism originally intended to ensure that even the wealthiest people paid some taxes, but that has ensnared millions of middle-class taxpayers.
Self-employed workers might consider starting a Keogh retirement plan today and pay a minimal deposit, say $100 or $1,000, to a bank or brokerage.
Also, many area business owners can buy equipment at the last minute to get a Section 179 expense deduction of up to $102,000.
But the equipment probably would have to purchased and installed today, because tax law requires it to be put into service before year's end.
Contact Homer Brickey at:
Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Comments that violate these standards, or our privacy statement or visitor's agreement, are subject to being removed and commenters are subject to being banned. To post comments, you must be a registered user on toledoblade.com. To find out more, please visit the FAQ.