December is the time to do any last-minute tasks that may have an impact on your tax return in 2021. Call for a tax planning consultation appointment if you have a significant increase or drop in income, a change in marital status or dependent status, or if you sold property in 2021.
December 10 - Report Tips to Employer
If you labor for tips and got more than $20 in November, you must disclose it to your employer on IRS Form 4070 by December 10th. Your employer is required to deduct FICA taxes and income tax withholding from your normal salary for these tips. If your regular wages are inadequate to pay FICA and tax withholding, your employer will record the amount of withholding that was not collected in box 12 of your W-2 for the year. When you file your tax return for the year, you will be obligated to pay the uncollected withholding.
December 31 - Last Day to Make Mandatory IRA Withdrawals
If you were born before July 1, 1949, today is the last day to withdraw funds from a Traditional IRA account without incurring a penalty. If you were born between July 1, 1949, and December 31, 1949, you might postpone your first distribution until April 1, 2022. If you must receive a payout in 2021 and the institution holding your IRA is closed on December 31, you must make arrangements to withdraw before that date.
December 31 - Last Day to Pay Deductible Expenses for 2021
Last day to pay deductible expenses for the 2021 return (doesn’t apply to IRA, SEP or Keogh contributions, all of which can be made after December 31, 2021).
December 31 - Caution! Last Day of the Year
If the actions you wish to take cannot be completed on the 31st or a single day, you should consider taking action earlier than December 31st.