Posts Tagged "standard deduction"

Get the best tax bang for deductions

Posted on Nov 1, 2011

Review your tax deductions for 2011. If you’re close to the cutoff point between itemizing or taking the standard deduction, consider the advantage of bunching your deductible expenses every other year. You can then alternate between itemizing one year and taking the standard deduction the next, saving tax dollars by doing so. For help in your calculations, contact our office....

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Don’t overlook these deductions; they’re available even if you don’t itemize

Posted on Feb 22, 2011

You’re probably familiar with the deduction choice you must make when you file your tax return. You either have enough deductions (such as mortgage interest, charitable contributions, and medical expenses) to itemize, or you take the standard deduction, a set amount that doesn’t require you to list specific deductible items. What you may not be as familiar with are those deductions that you are allowed to take “above the line”; that is, deductions that you can take in addition to your itemized deductions or the standard deduction. Here’s a quick rundown of above-the-line deductions you shouldn’t overlook when you prepare your 2010 tax return. * A deduction of up to $250 for classroom supplies purchased by teachers for use in their classrooms. * A deduction of up to $5,000 for individual retirement account contributions if you’re under age 50. If you’re 50 or older, you can deduct up to $6,000. * A deduction of up to $2,500 for interest paid on student loans. * A deduction of up to $2,000 or $4,000 for college tuition and fees, depending on your income level. * A deduction for the expenses connected with a job-related move. * A deduction for 50% of the self-employment tax paid if you are self-employed. * A deduction for alimony paid. (Note that child support is not deductible.) * A deduction for contributions to health savings accounts. Most of these deductions have qualification requirements or income limitations. Don’t overlook above-the-line tax deductions. An added benefit: These deductions decrease your “adjusted gross income,” an important number on your tax return. The lower your adjusted gross income, the more likely you are to qualify for credits and deductions subject to income thresholds. For details or assistance in finding all the deductions you’re entitled to, give us a...

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2011 tax numbers are adjusted for inflation

Posted on Jan 21, 2011

Adjusting numbers in the federal income tax code to account for inflation, known as indexing, is an annual event. Indexing affects deductions, exemptions, exclusions, tax brackets – and your tax planning. Here are selected changes to keep in mind as you review tax strategies for 2011. * Personal exemptions will increase by $50 to $3,700. You can subtract that amount from your adjusted gross income for yourself, your spouse, and any dependents. In addition, there is no phase-out or reduction in personal exemptions for 2011, no matter how much income you have. * The basic standard deduction is $11,600 when you’re married and file a joint return. If you’re single or married filing separately, the standard deduction is $5,800. Additional standard deductions are available for age and/or blindness. Note: The extra standard deduction for real estate taxes is not available for 2011. * The kiddie tax threshold for 2011 is $1,900. That’s how much investment income your child under age 19 (under age 24 for students) can earn before the income is taxed at your highest rate. * The traditional and Roth IRA contribution limit is $5,000. You can contribute an additional $1,000 if you’ll be age 50 or older by the end of the year. * The annual gift tax exclusion is $13,000 ($26,000 when you elect to split gifts with your spouse). * Standard mileage rates go up slightly. You can deduct 51¢ for each mile you drive your car for business purposes. The per-mile rate for calculating a charitable deduction is 14¢, and medical and moving mileage is deductible at a rate of 19¢. Many other items are subject to indexing. In addition, some important figures, such as the alternative minimum tax exemption, are adjusted by Congress. Please contact us for additional...

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