Tax
Tips
The following tax tips address frequently visited topics. If you
have questions you should feel free to call.
•
You may qualify to file form 2106 if you have expenses for your job
or business that are unreimbursed. Many taxpayers have this and don't
even realize it. This is an itemized deduction.
•
If you have self-employed income from a schedule C or you were issued
a Form 1099,Non-employee Compensation,you should strongly consider making a SEP contribution
rather than and IRA contribution. A SEP contribution (Simplified
Employee Pension) is fully tax deductible and can usually be larger
in amount than an IRA. Further, the SEP gives you other options an
IRA doesn't.
•
If you are self-employed or have self-employed income, you may be
eligible to deduct part of your health insurance premiums directly
against your income. This could be a big tax saver.
•
If you receive a 1099 in one year for money you physically receive
in the following year, you do not have to pick it up until that following
year. You should be sure to note this properly on your return.
•
You can deduct certain educational expenses. In general, if the education
is required by your employer or is to improve your skills in your
existing profession, you can write it off. Nowadays, with the need
for higher education, this is a deduction that can save big bucks.
You should consult with us or your tax advisor on this issue.
•
You can deduct a credit charge in the year it was charged, rather
than when you pay the bill. So if you charge a deductible expense
on December 20th, but don't pay the credit card bill until January
17th, you should take the deduction in the charge year.
•
If you make a charitable contribution of $250 or more, you should
obtain written acknowledgement from the charity and keep it with
that year's tax file. You do not have to enclose the receipt with
your filing to the government.
•
If you have a child you must have his/her social security number
in order to claim an exemption. This is true regardless of your child's
age. You can contact Social Security at 1-800-772-1213. Make your
life easy and just fill out the forms in the hospital when the baby
is born.
•
If you owe money on your return and you can't afford to pay it, enclose
what you can afford now and file the return with a balance due. Many
taxpayer's do not realize that the penalty for "Failure to File" is
10 times greater than "Failure to Pay."
•
The top long term capital gains rate is 15%. You may wish to cash
in on some of your paper profits before year end. If you have paper
losses, you may wish to sell them along with your profits and offset
these together. Your should aim for a total combined capital loss
of $3,000 for the year.
•
Did you know the following are deductible medical expenses if you
can itemize? Birth control pills, abortion costs, transportation
for medical care, drug rehab. The following are not: Health club
dues, stop smoking programs, weight loss programs, medication without
prescription, cosmetic surgery.
