Keep up on tax law changes. What's new for your tax return filing? A lot. Be sure you're aware of changes made that may affect your tax filing. Among those topics affected are nontaxable combat pay, retirement contribution limits, gift tax exclusions, reduction in itemized deductions and personal exemptions for higher income taxpayers AND THE GOVERNMENT SIGNED TAX REBATE.
There are also new tax guidelines regarding sales tax, educator expenses deduction, increased Health Savings Account deductions plus a few others. New credits available include those for energy-efficient vehicles and properties.Consult a tax professional or visit the Internal Revenue Service's 1040 Central page for a complete list of tax code changes.
Take advantage of tax-exempt accounts. Pay attention to your employer's open-enrollment periods. Take advantage of flexible spending accounts. Flex spend accounts allow you set aside pre-tax money for any medical expenses you incur over the year. This includes expenses like dental bills, over the counter medicine expenses and many other medical expenses.
You'll save $.30 on every dollar using a flexible spending account and there is no set federal limit. If you have children or older parents that you need to take care of, think about investing in a dependant care flex account. The maximum you can contribute is $5,000.
These pre-tax funds can be spent on things like summer programs, babysitting services or caretaker help. You won't pay federal or social security taxes on this money, which is a better deal than a deduction.
Deduct your home-office
Working from home full or part-time? Claim your home office deductions!
Take note, the IRS's criteria for this deduction are strict as it was once the most abused areas of the tax code. But that doesn't mean you shouldn't try to get this deduction. You will qualify if you work for yourself and use your home office exclusively for business purposes.
If you work for a company, you can claim the deduction if it's in the convenience of your employer. It's definitely one deduction possibility worth checking into.
If you don't qualify for a home-office deduction, you can still claim expenses associated with a home-based business. Office supplies, installation of telephone and fax lines, home mortgage interest and real estate taxes are expenses allowed as itemized deductions on your tax return even if you can't take a home office deduction according to CCH Tax and Accounting.
For a better sense of what deductions may be worth to you check out this home deduction calculator.
Condo ownership deductions Don't forget to deduct you condominium expenses. Especially be sure to deduct your maintenance fees if you qualify.
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