Show #375 Airing Sunday, 2/18/07
It’s painful enough to pay taxes. And many of us pay more than we have to, because we miss out on big tax deductions and credits. Here to tip us off on some valuable tax tips is a man who’s a “credit” to his profession, Tony Mercuri from Ta-Check Tax Service.
Question:It's tax season, and everyone is trying to save money. But many of us are still missing major deductions. Tony, you've made a list of big deductions many people miss. First on the list is New Points on Refinancing. Can you explain?
Answer: With interest rates having been so low over the past several years, many houses have been refinanced — sometimes more then once. Any points you pay to refinance your home can be deducted on a monthly basis over the life of the new loan. Because it is spread out for the life of the loan, the amount may not be huge, but every little bit helps.
Question:Next, Old Points on Refinancing.
Answer: All un-amortized points on an old loan are deducted in the year of the new refinancing.
So lets say you refinanced and paid $2400 in points and deducted $400 in previous years according to the first deduction we spoke about (new points on refinancing). If you refinanced again 2 years later, that would leave you with $2000 of unused points you could now deduct all at once.
Question:Then, Health Insurance Premiums.
Answer: Any health insurance premiums you pay, including many long-term care premiums, are potentially deductible. They are included in your medical expenses and have to exceed 7.5% of your AGI before they can be deducted.
And remember if you are self employed and not covered by any other employer paid plan, you can deduct 100% of the premiums above the line, meaning you do not have to exceed 7.5% of AGI.
Question:Tax Planning and Investment Expense.
Answer: Many people forget their tax preparation fees, IRA fees, brokerage fees, safety deposit box fees, etc. can be deductible.
Question:Fifth, people forget about the Retirement Tax Credit.
Answer: This credit is designed to give moderate to low income tax payers an incentive to save for retirement.
When you make a deposit into a retirement account, that money goes in pre-tax. Therefore, you do not pay tax on the deposit amount, and in addition you may even get a credit of as much as 50% of the first $2000 invested. The credit disappears for those who are married and filing jointly once the AGI hits $50,000.
Question:And finally, the Clean Fuel Credit.
Answer: Credits are good because they give you a dollar-for-dollar reduction in tax. So if you bought a new hybrid car or truck in 2006, you can get a conservation tax credit of between $250 - $1000 and an additional fuel economy credit between $400 - $2400.
Don't miss out on money-saving deductions and credits. To learn more, give Ta-Check a call. My thanks to Tony Mercuri.
