Posts Tagged ‘Tax Services Gilbert Arizona’

Mid-Year Tax Do’s and Don’ts

Now is the time to get organized on this year’s taxes.  Remember, the key to saving on your taxes is to staying on top of the information you need.  Follow my blogs and I will keep up to date with the new tax laws.

If you don’t have the tax information and substantiation at your fingertips, then you could easily miss out on tax breaks and end up paying the IRS much more than you should like $1000’s more.

Look at last’s years taxes and see the kind of information that is needed.  That’s why the recommendation to get your tax filing material organized now is a great way to be ready for the year end and the next tax filing season.

Your organization system doesn’t have to be complicated. It can be on your computer via a self-created spreadsheet or one of the many prepared packages available like Quicken or even QuickBooks if you have the software.  You can get cheap software at the local office supply store.  Just remember you do need paper backup.

Or, if you’re old-fashioned, a paper-based filing system is fine like file folders you can put in one of the plastic filing boxes.

  • One folder should be for medical expenses.
  • Another for charity donations.
  • Another for un-reimbursed business expenses.
  • Another is for big purchases like autos, trucks or boats to keep track of sales taxes and license fees.
  • There are also tax credits for improving your house with installation materials and solar equipment.
  • For college students or post secondary education students, the tuition fees, books, supplies and computer equipment are good for tax credits.
  • Day-care expenses can give you some tax credits.
  • Looking for a job is a tax deduction so keep track of the mileage and expenses.
  • Investment information and records of trades and income items.
  • Miscellaneous and items at year end like W-2’s, 1098’s, 1099’s.
  • These are a few suggestions.

The key is to pick one system and stick with it.  But the first step is to set up your system.

Even if you’ve been diligent about keeping all the relevant tax material but just threw it into a box, consider sorting those documents and putting them into your filing system now.

By breaking out the information into the appropriate tax filing categories, your annual Form 1040 tasks will go much more quickly and, I hope, produce a better financial result for you instead of for Uncle Sam.

And as you continue to put material into your filing system, you’ll be alerted to what holes exist in the documentation.

Discovering this means you can plug the gaps as they arise instead of scrambling to find the data when you’re already facing the April 15 deadline.

Six Year-End Tips to Reduce IncomeTaxes

You usually need to take action no later than Dec. 31 in order to claim certain tax benefits. Here are six tax-saving tips for you to consider before the calendar turns:

Income Tax Preparation Service

1. Make Charitable Contributions – If you itemize deductions, your donations must be made to qualified charities no later than Dec. 31 to be deductible. You must have a canceled check, a bank statement, credit card statement or a written statement from the charity, showing the name of the charity and the date and amount of the contribution for all cash donations. Donations charged to a credit card by Dec. 31 are deductible, even if the bill isn’t paid until later year. If you donate clothing or household items, they must be in good used condition or better to be eductible.

2. Install Energy-Efficient Home Improvements –   Homeowners going green should also check out the Residential Energy Efficient Property Credit, designed to spur investment in alternative energy equipment. The credit equals 30 percent of the cost of qualifying solar, wind, geothermal, or heat pump property.

3. Consider a Portfolio Adjustment – Check your investments for gains and losses and consider sales by Dec. 31. You may normally deduct capital losses up to the amount of capital gains, plus $3,000 from other income. If your net capital losses are more than $3,000, the excess can be carried forward and deducted in future years.

4. Contribute the Maximum to Retirement Accounts – Elective deferrals you make to employer-sponsored 401(k) plans or similar workplace retirement programs must be made by Dec. 31. However, you have until April 15, of the next year, to set up a new IRA or add money to an existing IRA. You normally can contribute up to $5,000 to a traditional or Roth IRA, and up to $6,000 if age 50 or over.

5. Make a Qualified Charitable Distribution – If you are age 70½ or over, the qualified charitable distribution (QCD) allows you to make a distribution paid directly from your individual retirement account to a qualified charity, and exclude the amount from gross income. The maximum annual exclusion for QCDs is $100,000. The excluded amount can be used to satisfy any required minimum distributions that the individual must otherwise receive from their IRA’s. This benefit is available even if you do not itemize deductions.

6. Don’t Overlook the Small Business Health Care Tax Credit – If you are a small employer who pays at least half of your employee health insurance premiums, you may qualify for a tax credit of up to 35 percent of the premiums paid. An employer with fewer than 25 full-time employees who pays an average wage of less than $50,000 a year may qualify. For more information see the Small Business Health Care Tax Credit page on