Personal Planning Newsletters - December 15, 2005

Dear Friends:

Some deductible items to think about paying on or before December 31 if you itemize deductions:

1. Ohio estimated income tax. Although federal and state estimated income tax payments are not due until January 17, 2006 (January 15 falls on a Sunday and January 16 is a federal holiday), your state payment will be deductible on your 2005 federal income tax return if it is paid in 2005. If you pay it in 2005, be sure to tell your tax return preparer that you paid it early!

2. Mortgage Interest. Many people have a mortgage payment due early in the month. You can ask your bank to make your January mortgage payment in late December so that you can get that extra interest deduction this year. Then check the mortgage interest statement that your bank sends you early in 2006 to be sure that the total interest is calculated correctly. Also check that the bank gets you back on the regular payment schedule in February.

3. Charitable Contributions. You can make charitable contributions (and any other deductible payment) by check or credit card right up until midnight on December 31. The check does not need to be cashed this year, and the credit card charge does not need to be processed or paid this year. Just postmark it by December 31. (Contrast this treatment with that of $11,0000 annual exclusion gifts to family and friends; they need to be cashed by December 31 to qualify for the 2005 annual exclusion.) A number of websites provide help in evaluating charities, and making sure that contributions to them are deductible:

http://apps.irs.gov/app/pub78
www.charitynavigator.org
www.guidestar.org (You will be asked to register, which is free.)

If you have any question, please contact Mark Jordan.

This communication does not provide individualized advice and the information in it might not be appropriate for your situation. This communication is not intended to, and does not, cover all changes in tax and other laws that might be appropriate for your situation.

ANY FEDERAL TAX ADVICE CONTAINED IN THE FOREGOING IS NOT INTENDED OR WRITTEN BY THE PREPARER OF SUCH ADVICE TO BE USED, AND IT CANNOT BE USED BY THE RECIPIENT, FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON THE RECIPIENT. THIS DISCLOSURE IS INTENDED TO SATISFY U.S. TREASURY DEPARTMENT REGULATIONS.