HomeOwners

  • Mortgage interest is your biggest tax deduction
  • Usually you can deduct the points you paid on your home loan
  • Your home equity loan interest can be deductible
  • Your cost of refinancing your home can be deductible
  • You can gain capital on the sale of your home

Planning Your Taxes

  • If your medical expenses are close to your AGI (7.5%), consider having additional treatements & services for that year
  • Make donations and charitable contributions before January 1st
  • Consider paying your property tax bill prior to January 1st
  • Maximize your contributions to 401(k) and 403(b)
  • Make IRA contributions

Prepare it Yourself

  • 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 right 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 preparing it by hand

Families

  • The Child Care Credit can cut $2,100 from your tax bill
  • Take up to $10,000 off your taxes by adopting a child
  • 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

Filing Extensions

  • 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