Thursday, March 4, 2004
More Bang for Your Buck: Getting More From Your Tax Return
We're just about a month away from "tax day." But before you file with Uncle Sam, you might be deserving of a few more deductions. So in tonight's more bang for your buck, we've got some helpful tips for a higher refund.
"I like it," he says. "Even if it's hot, humid or whatever I'll take outdoors here anytime."
But this time of the year, he'd rather stay inside and work on his taxes.
You see, believe it or not, Doug actually sees this yearly ritual as a game.
"I don't dislike it, and it really is something that's almost fun," he says. "I've always looked at it as more of a problem solving sort of thing."
A problem that can be solved with the right strategy.
Tax accountant John Ebenger says you can crack the code by reducing common missed deductions.
"There's a number of business expenses that many people miss," says John, accountant at Berkowitz, Dick, Pollack & Brant.
Like job search expenses, union dues, and healthcare...
"The insurance premiums that are 100% deductible are only applicable to self-employed individuals," says John.
But all medical expenses not covered by insurance are 100% deductible - including birth control pills, contacts or glasses, and stop smoking programs.
"What I find is a lot of people miss that fact, that there is an opportunity to donate appreciated assets," says John.
We all know anything donated to charity can be deducted, but what about driving to a charity?
Even if you're just dropping clothes off, you can claim travel costs at 14 cents a mile.
"That deduction is limited to the fair market value of the product or, sometimes the IRS says, the thrift shop value," John explains.
For another deduction, think refinancing.
It can come from your home, your car, or anything else that requires a loan.
"Old loans that have been refinanced and paid off with new loans, those points are deductible," says John.
And if you hired someone to do your taxes last year, you can deduct those fees on this year's form.
We know Doug did his taxes himself.
He's looking forward to a refund... and maybe a short vacation too.
"It's like a bonus in the middle of the year," he says.
It's also especially important to start preparing now for next year.
Invest in your retirement, pay off nondeductible interest on credit cards and keep all your receipts to maximize your deductions.
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