A reminder of some unpleasant year-end business that could save you a few bucks -- payment of your 2005 state and local taxes. If you itemize your deductions on your 2005 federal income tax return, and you're not subject to the federal alternative minimum tax (AMT), you'll be eligible to deduct whatever you paid in 2005 in state and local taxes. That means that if you pay your state and local taxes by the end of 2005, they'll be available as deductions on your 2005 federal return. If you wait until April to pay, you won't be able to deduct them until your 2006 federal return, which is more than a year away at this point.
So if you expect to owe, say, Oregon income tax for the year, and you won't owe federal AMT, get your estimated tax return and check in the mail, postmarked no later than Saturday. The form is here. And of course, all of us who live in Multnomah County will be paying county income tax again. If you itemize deductions on your federal return and don't owe AMT, now's the time to pungle up to the county. Form MC ES (pictured above) is the form you use to pay now, and it's available on page 17 of this pdf file.
I suspect that's the last we'll see of that form, and that particular tax, for a good long while.
UPDATE, 11:28 p.m.: An alert reader correctly points out that the early-payment gambit won't make much sense if you're subject to the federal alternative minimum tax (AMT), which affects many upper-middle- and high-income taxpayers. If you know you're going to be subject to AMT, don't pay your state and local taxes any earlier than the state or locality requires. I've revised the orignal post above to make that distinction.