Thursday, March 22, 2007
More Bang for Your Buck: Tax Breaks
The deadline for this year's tax returns is less than a month away. On tonight's More Bang For Your Buck, we'll tell you where to find some last minute breaks that could help you save big if you're still crunching numbers.
WSVN -- Jewelry store owner Sandy Hequin loves to shop, but her most recent find didn't fit in a shopping bag.
Sandy Hequin: "I bought my husband a new car for our anniversary."
It cost a lot of money, but it could save her on her taxes.
Her CPA told her she can deduct the sales tax.
Sandy Hequin: "The sales tax on an Aston Martin is $8,000, I deducted that. That was a nice break -- a nice discount on the car, we'll call it."
Miami tax attorney Mike Farra says this deduction works for anyone.
Mike Farra: "Clothing, personal items. It could be a car, a computer, a boat."
But you have to have your receipts.
If you do...
Mike Farra: "You can actually do the sales tax amount by adding up all your sales taxes during the course of the year."
But if you don't have receipts you can still take a deduction.
The IRS has guidelines you can use.
Mike Farra: "You can use the tables that the IRS provides you based on your adjusted gross income."
Sandy will save big this year by claiming the sales tax deduction and says that the extra money helps her sleep a little easier.
Sandy Hequin: "That giant check that I have to write on April 15th is a little smaller. Everyone likes to keep a little change in their purse."
Another deduction that could save you money, child support.
If you and your spouse have to pay for child care while you're at work, you can receive a credit on your returns.
Mike Farra: "The lowest percent is 20 percent -- so it could be a credit of $600 per child, per year, and the highest credit, depending on your income, would be 27 percent."
And, for large families, there is no limit to how many children you can claim.
Mike Farra: "If you have four kids, you can claim for each kid that you have."
And, hold the phone, here's another deduction that will help people who talk a lot.
Mike Farra: "A new provision of the law this year is a refund for excise taxes paid on long distance telephone calls."
Look on your phone bills under the total tax amounts, find the federal excise tax amount listed on each bill, and add them up.
Mike Farra: "It's a specific line item with a specific name, and that is the tax we are talking about. That is the tax that is refundable."
Tom Haynes: "One more tip: If you use your home phone or computer to check in to the office or work on tomorrow's project, those can also be treated as a deduction."
FOR MORE INFORMATION:
Mike Farra, CPA
Morrison, Brown, Argiz and Farra, LLP
1001 Brickell Bay Dr. 9th Floor
Miami, FL 33131
Internal Revenue Service
Last Minute Deductions: