Tax Tips

TAX Experts wants you to get all the deductions and credits you're entitled to. For that reason, we invite you to view our list of tax tips and tactics designed to help you reduce your tax burden.


Automobile

Actual Expenses of Car

When you use a car for business, you may deduct the mileage expense by using either the standard mileage rate or the actual expenses of maintaining the vehicle. If you take the actual expenses, you can deduct the depreciation, gas, oil, insurance, tires, licenses, repairs, etc. If you choose to take actual expenses when you first start using the car for business, you cannot change to the standard mileage rate deduction


Business Job Related

Computer and Cellular Phone

If you purchased a computer or cellular phone and use it for business, you may be able to claim a depreciation deduction. Your employer must require you to have the phone or computer as a condition of your employment, and you must use them for the convenience of your employer. You must keep a record of the personal and business use of the computer or phone to determine the percentage of business use.


Casualty and Theft Losses

Casualty and Theft Loss - Auto

If you have been involved in an automobile accident, the damage to your car may be considered a casualty loss if you itemize deductions. This would apply if the loss were not due to your negligence or the negligence of someone driving your vehicle. The loss must first be reduced by any insurance or other reimbursement plus $100, and then by 10% of our adjusted gross income.


Change of Address

Are you planning a move before the end of the year? The IRS has its own official change-of-address form, Form 8822, Change of Address. Complete this form and send it to the IRS to ensure they have up-to-date information in case they need to contact you. If you do not contact the IRS about a change of address, you can further compound any issues you have with the IRS.


Charitable Contributions

Charitable Contributions - Charity Benefit or Event

Have you attended a charity benefit or event lately? You may be able to deduct the dollar amount that is more than the fair-market-value of the event. For example, you attend a dinner for a qualified non-profit organization and your ticket price is $65. If the regular price of the meal would have been $10, your contribution amount would be $55.


Child Dependent

Additional Child Tax Credit - Refundable Credit

List If you receive less than the maximum $1,000 per qualifying child for the Child Tax Credit because it is limited to your tax liability, you may be entitled to receive all or part of your remaining Child Tax Credit as a refundable Additional Child Tax Credit.


Earned Income Credit

Earned Income Credit - Combat Pay

Although, combat pay is not included in income when calculating your federal income tax, you have the option of including combat pay as earned income when calculating the Earned Income Credit (EIC). You should calculate your return both ways (including and not including combat pay as earned income for EIC purposes) to determine which way gives you the more advantageous result.


Education

Coverdell Education Savings Accounts (Education IRAs)

An education savings account, Coverdell ESA, can be established for a child under he age of 18. Any individual (including the child) can contribute to the account during the year if they meet certain income limitations. The total annual contributions per beneficiary are limited to $2,000. Withdrawals will be tax-free when used to pay education costs (elementary school, secondary school, or a post-secondary school such as a college) for the beneficiary.


Estate and Gift Taxes

You can generally give money or property to another person without any tax consequences provided the amount does not exceed $13,000 per year. If this amount is exceeded, it must be reported on a gift tax return. The unified credit effectively exempts from tax the first $5,120,000 of such cumulative transfers of gifts.


Filing

Electronic Filing

Electronic filing, or e-file, reduces the time it takes to get your tax refund and reduces common errors such as mathematical errors. You must have a valid Taxpayer Identification Number (TIN) for every person included on the return.


IRA Retirement

Individual Retirement Arrangement (IRA) - Early Withdrawal

There is no additional 10% tax on early withdrawals up to $10,000 in your lifetime from an IRA if you are buying a first home for yourself, your children, or your grandchildren. There is also no additional 10% tax if you are paying higher education expenses for yourself, your spouse, your child, or your grandchild.


Itemized Deductions

There is no maximum income limit on itemizing deductions through 2013.


Lottery

Deducting Cost of Lottery Tickets

If you were lucky enough to win money in a lottery, you can deduct the cost of your losing tickets for the year as an itemized deduction. The amount of the deduction is limited to your lottery winnings. You can also deduct losses from other types of gambling against your lottery winnings. If a husband and wife file a joint return, they can use their qualified combined losses to offset their combined winnings.


Medical and Health

Social Security and Medicare Wages and Taxes

For 2013, the total wage limit for amounts subject to Social Security tax is $110,100 and total Social Security taxes are $4,624.20. Social Security taxes withheld from your paycheck was reduced to 4.2% of your pay, 10.4% if you are self-employed, again this year. There is no limit for wages subject to Medicare tax.


Miscellaneous Expenses

Itemized Deductions - Miscellaneous Expenses #1

Various expenses fall in the category of miscellaneous deductions. Job-hunting, job travel, union dues, tax preparation, and safety deposit box fees are all examples of miscellaneous deductions. If you itemize, you can deduct the amount of miscellaneous expenses that is over 2% of your adjusted gross income.


Real Estate Property

Basis of Property - Gains and Losses

When you purchase property, the basis is usually its cost. Your cost also includes amounts you pay for sales tax paid on the purchase, commissions, and freight charges. Keep accurate records of all items that affect the basis of the property. This will help you to determine if you have a gain or loss when the item is sold.


Tax Filing Status

Filing Status - Annulled Marriages

If you obtain an annulment that declares your marriage never existed, you are considered unmarried for this and any previous tax years. You must amend your tax returns for all the tax years not affected by the statute of limitations for filing a return (usually three years) to show this change in marital status.