M.F. &
Associates - tax tips
The following
tax tips address frequently visited topics. If you have questions you should
feel free to call.
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You may qualify to file
form 2106 if you have expenses for your job or business that are
unreimbursed. Many taxpayers have this and don't even realize it. This is an
itemized deduction.
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If you have self-employed
income from a schedule C or you were issued a form 1099, you should strongly
consider making a SEP contribution rather than and IRA contribution. A SEP
contribution (Simplified Employee Pension) is fully tax deductible and can
usually be larger in amount than an IRA. Further, the SEP gives you other
options an IRA doesn't.
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If you are self-employed
or have self-employed income, you may be eligible to deduct part of your
health insurance premiums directly against your income. This could be a big
tax saver.
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If you receive a 1099 in
one year for money you physically receive in the following year, you do not
have to pick it up until that following year. You should be sure to note
this properly on your return.
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You can deduct certain
educational expenses. In general if the education is required by your
employer or is to improve your skills in your existing profession you can
write it off. Nowadays, with the need for higher education, this is a
deduction that can save big bucks. You should consult with us or your tax
advisor on this issue.
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You can deduct a credit
charge in the year it was charged, rather than when you pay the bill. So if
you charge a deductible expense on December 20th, but don't pay the credit
card bill until January 17th, you should take the deduction for the prior
year.
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If you make a charitable
contribution of $250 or more, you should obtain written acknowledgement from
the charity and keep it with that year's tax file. You do not have to
enclose the receipt with your filing to the government.
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If you have a child you
must have his/her social security number in order to claim an exemption.
This is true regardless of your child's age. You can contact Social Security
at 1-800-772-1213. Make your life easy and just fill out the forms in the
hospital when the baby is born.
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If you owe money on your
return and you can't afford to pay it, enclose what you can afford now and
file the return with a balance due. Many taxpayer's do not realize that the
penalty for "Failure to File" is 10 times greater than "Failure to Pay."
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The top long term capital
gains rate is 15%. You may wish to cash in on some of your paper profits
before year end. If you have paper losses, you may wish to sell them along
with your profits and offset these together. Your should aim for a total
combined capital loss of $3,000 for the year.
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Did you know the
following are deductible medical expenses if you can itemize? Birth control
pills, abortion costs, transportation for medical care, drug rehab. The
following are not: Health club dues, stop smoking programs, weight loss
programs, medication without prescription, cosmetic surgery




