Home Page

Search Winona Post:
   GO   x 
Advanced Search
  Issue Date:  
  Column / Category:  
  Current Issue  
  Past Issues  
   Help      Close     GO   Clear   
  Sunday January 25th, 2015    

 Submit Your Event 





| Home | Advertise with Us | Circulation | Contact Us | About Us | Send a Letter to the Editor |

  (ARCHIVES)Back to Current
Some tax deductions we may miss (09/01/2010)
by Richard Schneider

Emeritus Professor of Accounting

Itís never too early to think about your taxes for 2010. We like to estimate our tax liability about a year in advance. For 2010 we did an estimate in December of 2009, and discovered we were going to be significantly under withheld, we would not be able to itemize due to the sale of our home by midyear, and would have to draw some retirement funds to finish the remodeling for sale. We have made adjustments and now there should be no large amount tax due or penalty when we file.

There are some things taxpayers miss, especially in the heat of tax filing season. Now is a good time to review some of these and use our spare moments to catch deductions that will save us tax dollars come time to file in the spring.

State and local sales tax: (assuming this will be extended to 2010) If you itemize do not over look the possibility of using sales tax paid, rather than the state income tax. Taxpayers can claim the larger of the two, not both, but the larger of the two. In Minnesota in most cases it will be state income tax, but in certain cases, such as acting as general contractor for the building of a new home, the purchase of trailer home, or manufactured home, or RV, the sales tax paid, plus the standard amount allowed, for your income level, may well exceed the amount of state income tax paid that year. You can also add the sales tax paid on other large purchases such as autos and trucks. Another benefit of using the sales tax is that if you receive a refund from the state, it will not be taxable in 2011, as part or all would be if you had used the state income tax as a deduction.

Reinvested Dividends : Next, you may sell some investments, and if they are mutual funds, there is a good chance there was reinvested dividends over the years, which increase your cost basis and reduce the amount of reported taxable gain. This is information your broker should be able to provide, and better now than making a request in March, or two days before the filing deadline. Also a planning note here, 2010 is the last year; there is zero tax on long term capital gains, if the taxpayer is in the 15% bracket or lower, including the amount of the gain.

Moving expenses: Even if you just took your first job out of school, you may be able to deduct your moving expenses, to move from home to the new city. With lost jobs and taking new ones in another city or state your moving expenses may also qualify for the deduction. This is a deduction even if you do not itemize.

Out-of-pocket expenses for a charitable organization: Frequently I or my wife will purchase supplies, or put on miles, for one of the charities we work with. The cost of these are deductible as a charitable contribution, but I need to gather the receipts, prepare a statement, and have an official from the charity sign off, which validates the deduction. The organization should be given a copy of the statement and receipts for its records.

Child care credit: This credit is not just so you can work, but also may apply for child care, while attending classes and looking for work. Child care providers that qualify may range from Happy Days Inc, child care to the neighborís daughter or son that does babysitting. Just remember the purpose must be for work, looking for work, or obtaining an education to obtain work, not to go to a movie, or out to dinner.

Consult your tax professional to see if these may apply to you. Also the IRS web site, has publications explaining these deductions, and is a good source of information. http://www.irs.gov 


   Copyright © 2015, Winona Post, All Rights Reserved.


Send this article to a friend:
Your Email: *
Friend's Email: *
 Back Next Page >>



| Home | Advertise with Us | Circulation | Contact Us | About Us | Send a Letter to the Editor |

Contact Us to
Advertise in the
Winona Post!