Money Sense
ARE YOU TAKING ALL YOUR DEDUCTIONS?
As tax season approaches, keep in mind that millions of Americans OVERPAY their taxes each year. If you don't take all of the deductions you're entitled to, you could be giving the IRS too much of your hard earned money.
Now first realize that the Standard Deduction isn't for everyone. If you automatically take the standard deduction every year, take some time to figure out if that's really your best strategy.
While it may be simpler just to plug in a single number, calculating the difference between the standard deduction and your itemized deductions may save you money by reducing the amount of tax you have to pay. If the standard deduction is lower, you should itemize.
Keep track of your miscellaneous deductions. Some expenses may qualify as miscellaneous deductions.
These include tax preparation fees, investment expenses, job hunting costs, certain legal fees, and unreimbursed work related expenses, such as home office or travel costs.
Any uniforms or other necessary equipment u needed for your job are deductions also. This may also include any seminars you had to attend, or perhaps you had to take a class at college.
Keep a list of these expenses throughout the year. Or, look through your checkbook and credit card statements at tax time for expenses that might qualify.
While certain deductions may be potential "red flags" to the IRS, don't let the fear of an audit stop you from taking legitimate deductions.
All contributions to church......anything you gave to charities, or clothing to Salvation Army or similar type places. You may claim these deductions up to a certain amount without having a receipt.
You would be surprised after putting down mortgage interest, property tax, and all contributions, that you will come up with more than the Standard Deduction.
One other way to reduce taxes is taking out an IRA......the IRS allows up to $3000.00 this year for an IRA. You can have monthly payments taken out of your checking account.
You can also have an IRA for any amount.....of course if an emergency comes up you are not locked into keeping it.
Number one rule......be sure to seek professional tax advice before taking any action.
A good tax preparer will try different ways to get the best return for you.>br>
