Mortgage interest is usually your biggest tax deduction.
In most cases, you can deduct the points you paid on your loan.
Second mortgage & home equity lines of credit can be deductible.
Re-financing costs can be deductible.
Property taxes are typically deductible.
There can be tax free capital gains on the sale of a home.
Be aware of the Mortgage Interest Credit.
Exclude up to $500,000 of gain from taxes when you sell your house.
If your medical expenses are close to the AGI limit (7.5%), consider having additional treatments & services within the same calendar year. Tax Preparation and Planning requires intimate knowledge.
Consider paying your January mortgage payment in December.
Make donations prior to January 1st.
Consider paying your property tax bill prior to January 1st.
Plan for the alternative minimum tax.
Maximize contributions to 401(k) and 403(b).
You have until April 15 to make an IRA contribution.
Unlike personal income, business income is not taxed – only the profit on a business is subject to taxes.
The Self-Employment Tax is independent of profit.
Keep all your receipts.
Deducting your home office and associated expenses provides excellent tax breaks.
Turn non-deductible vacation expenses into deductible business travel.
You must set up most retirement plans by December 31 in order to get a tax deduction for the current year.
Hire your kids and save on taxes.
You can deduct up to $100,000 of capital equipment costs ranging from computers to certain sport utility vehicles.
Make sure you check your math.
Make sure you understand how the tax law changes apply to you.
Make sure you are using the correct tax forms.
Make sure you sign your return.
Make sure you use last years return as a starting point.
Make sure you choose the optimum filing status.
Form 1040EZ may be easy but the long form 1040 may cut your tax bill.
Using the incorrect tax table can cost you money or trigger an audit.
Missing valuable deductions such as 50% of self employment tax can cost you money.
Make sure you calculate the minimum alternative tax.
Avoid math errors and unwelcome letters from the IRS by using tax software to prepare your taxes instead of by hand.
The Child Care Credit can cut $2,100 from your tax bill.
Take up to $10,000 off your taxes by adopting a child.
Take advantage of the Kiddie Tax Rules.
Setting up a ROTH IRA for your children creates another deduction.
Consider the advantages of a living trust.
Enroll in Child Care Reimbursement Plans at work.
Child tax credit increased to $1,000 per child.
Students should check with parents before claiming an exemption deduction on their own tax return.
Make sure you get a social security number for each of your children.
Use a qualified prepaid tuition program under a Section 529 Tuition Savings Plan to pay for future education.
Consider a Coverdell Education Savings Account and save up to $2,000 per student per year.
Deduct up to $2,500 of student loan interest per year.
Get up to $5,250 of employer sponsored tuition reimbursement deductions.
Beware that some scholarships and grants are taxable. Know the difference.
Take a deduction for tuition and fees even if you don’t itemize.
Eligible teachers get a deduction for classroom expenses.
If you donâ€™t qualify for the Hope or Lifetime Learning Credit — then consider a tuition and fee deduction
Answer any IRS correspondence immediately.
Keep copies of everything you send and receive from the IRS.
Keep prior year tax returns and records for at least 7 years from the due date of the return or date you filed, whichever is later.
Keep good records that substantiate your income and deductions — this may save you from paying additional taxes, interest or penalties.
You can get an automatic four month extension of time to file your federal return by filing Form 4868 on or before April 15th.
If you need more time — you can apply for an additional two month extension of time to file by filing Form 2688 on or before August 15th.
It is possible to get an extension of time for payment of tax by filing Form 1127 — but you must be able to show that immediate payment would cause severe loss and undo hardship. Note: Legal requirements are strict.
An extension of time to file is not an extension of time to pay. Pay your tax by April 15th and avoid further penalties and interest.