The end of the year gets so crazy. But you can make it crazy good for your taxes by checking out my slideshow of 10 tax moves to make by Dec. 31.
Oh, you already did? Thanks! Then I've got a bonus 11th tax move tip just for all you loyal blog readers: Make sure you have enough cash on hand to cover your Roth conversion taxes.
A Roth IRA is a great benefit, as mentioned in slide No. 10. Although a Roth account won't get you an immediate tax break because your contributions are made with already-taxed money, when you finally take money out of the account, you won't owe the Internal Revenue Service a cent.
That's why a lot of people have taken advantage of the tax law change that allows anyone, regardless of income, to convert a traditional IRA to a Roth.
And folks who converted their traditional individual retirement accounts to Roths in 2010 got an extra tax incentive.
They were allowed to postpone taxes on the converted amount. Even better, they get to divide any taxes due on converted Roth IRA cash equally over the 2011 and 2012 tax years rather than coming up with the whole amount of tax due at once.
Now, however, the time for that first payment is almost upon us. Your first Roth conversion tax amount is due with your 2011 tax return.
Yeah, 2010 was awhile ago, so I thought that might have slipped your mind. Aren't you glad you've got me to remind you? That's my husband's reaction to my well-intentioned prompting, too. But I digress.
Even though you don't have to pay up until you file your taxes next year, which could be as late as Oct. 15 if you get an extension, you'll eventually have to hand over taxes on half of your converted Roth IRA amount.
Get a head start on that payment now. Maybe can sock away some cash you get as a Christmas gift to go toward this tax bill.
Yeah, that's not exactly what I would want to do either. But preparing for the impending tax payment now sure beats getting a big surprise, and tax bill, when you fill out your 2011 Form 1040.
Get the latest news of tax news, tips and tax planning advice, both for the end of the year and next filing season, by subscribing to Bankrate's free Weekly Tax Tip newsletter.
You also can follow me on Twitter at @taxtweet.