Show #284 Airing: Sunday, February 13, 2005
Remember when you had to remind your kids to stop procrastinating and do their homework? Well, kids aren’t the only procrastinators. Adults often do it too-- with their taxes. But waiting to get your finances in order can cost you money. Today, Tony Mercuri from Ta-Check Tax Service is here to give us some up-to-the-last-minute tax tips that can help you keep more of your moolah.
Question: Can we do anything now to save money on our taxes?
Answer: It is too late for many tax savings tips, but the door is not entirely closed yet. The first item would be a contribution to an IRA. As long as you have earned income you can make a contribution. The maximum for 2004 is $3000 or $3500 if you are over 50, and you have until April 15 th to make this contribution.
If you are a self employed individual you can contribute to a SEP IRA. The maximum amount here is 20% of the self employment income or $41,000 whichever is smaller.
Question: What else can someone do?
Answer: Well unfortunately, it’s too late to make donations, or invest in college savings plans. The most important thing is to make sure you don’t miss any important deductions.
Question: … What are some of those?
Answer: Mileage driven for medical purposes or mileage driven for charitable purposes.
If you refinanced in 2004 you can fully deduct any remaining points you may have paid on the previous mortgage.
Also real estate taxes on vacation homes can be deducted.
Don’t forget to keep good records, especially if you have any work related expenses that do not get reimbursed by the company.
Question: What if you travel a lot for your job?
Answer: Well again, if those expenses are paid by you and not reimbursed by your employer, you can write those off.
Also, you may be entitled to a refund on your city taxes for the days you spend working out of town.
Also, if you are self employed, your health insurance is now 100% deductible this year, which is up from 70%.
Question: Can you give any other advice?
Answer: This may seem obvious, but that is not always the case. Pick the right filing status. If you are single and have provided a home for more then 6 months for a child, grandchild, or parent, you can claim Head of Household, which is better then claiming single.
If you are married, make sure you check whether to file joint or separate. Filing separate is not always best for federal taxes, but you may see great savings on the state return that make it advantageous. So make sure you check both the federal and state taxes.
Even though 2004 is over, there are still ways to save money on last year’s taxes. Give Tony a call to find out more.
