Wish you happy holidays!

Here are couple of tax planning tips as we approach 2009 year end. 

If your real estate taxes are being impounded, you may be able to ask your lender to pay off both installment of taxes now!  This will generate the potential deduction for the 2nd installment during 2009.  Most likely, enough monies are sitting around in your impound account which may be earning little or no interest.  All you have to do is just conact the lender and instruct them to pay off both the installments.  If the reserves are not enough, sometimes the lender may change your monthly payments or they may not pay off all the taxes but it is worth looking into.

Similarly, you may be able to pay the January 2010 mortgage installment towards the end of December.  This will generally increase the amount of interest you have paid for the current year!  Please make sure it is treated as January payment and not as an extra payment.  Otherwise, your January payment may still be due! 

If you do it once, both of the above may have to be done annually thereafter.  Otherwise, the deductions may be less in the year in which you miss it!  Similarly, few other things may be doable to reduce your 2009 tax liability.  Now is the best time to estimate that liability and do the tax planning as needed.