A number of items are deductible only if they are actually paid. An example is a charitable donation. For a donation to be deductible in 2015 it must be paid in 2015. If you are about to make some donations it is more beneficial to pay them before the end of this month and deduct them for 2015 when you file your tax return next spring. If you wait until January you won’t see the tax benefit of the donation until the spring of 2017.
If you are contemplating a donation and you have publicly traded stock with unrealized gains you may want to consider donating the shares instead of cash. Your donation will be the value of the shares and you will not need to pay the tax on the capital gain. If you like the share, you can purchase additional shares after making the donation without any negative effect.
Other items that must be paid to be deducted are political contributions, alimony, childcare expenses, medical expenses, professional dues and tuition fees.
If you have any questions about year-end or other tax planning, call or email any one of our willing and able Tax Team members:
- Garry 204-977-3520 or firstname.lastname@example.org
- Alex 204-977-3518 or email@example.com
- Ken 204-957-8205 or firstname.lastname@example.org
- Ann 204-977-3879 or email@example.com