Tag Archive | "save taxes"

Save Taxes – Community Service Tax Deductions

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Save Taxes – Community Service Tax Deductions: Many people think of community service as something that is just a good thing to do. And yes, that’s quite true. We’re definitely not here to tell you that community service is a bad thing. However, there are definitely some other reasons that community service can help remedy some tax issues as well. Don’t be shocked to see that there are ways to save taxes by performing community service.

Find A Taxman Right Now To Help Save Taxes!
Check Out: Tax Survival Guide!

Again, please don’t use this article to merely save taxes. This is just an added perk that can come for doing something good for your community or for a charitable organization.

If you don’t own a home and don’t have huge amounts of medical expenses, you probably don’t have enough to itemize your deductions. Don’t know what that means? Let’s go through a short tax lesson.

The government allows you what is called a standard deduction when you file your tax return. In 2011, if you are single, your standard deduction is $5,800. If you are married, you and your spouse have double that at $11,600. Senior citizens over the age of 65 get an extra $1,150. You are allowed the best of your standard deduction or itemized deductions.

So what makes up your itemized deductions? The three big numbers are always medical expenses (though a percentage of your medical expenses don’t count towards this), your mortgage interest and real estate taxes. Safe deposit box fees, tax preparation fees, union dues, and sales taxes or state/local income taxes also count in your itemized deductions.

However, the one thing that we haven’t discussed yet is community service. Any cash contributions that you make are a part of your itemized deductions, but that means money going out of your pocket to get a tax break. For example, if you are in a 20% tax bracket, if you donate $500 to charity and have enough to itemize your deductions, you’d be saving $100 in taxes.

What about non-cash items? The truth of the matter is that you aren’t using all those clothes in the back of your closet any longer. If you get rid of them by donating them to charity, you can get some deductions for them (up to $50 per bag of clothes). Sure, when you think about it, that’s only $10 of actual tax, but if you were just going to throw all of those clothes out, you may as well collect the $10 that Uncle Sam is going to give you.

The same is true about mileage for community service. If you drive to perform some community service, you’re entitled to $0.14 worth of deductions for every mile that you drive. Sure, if you drive 100 miles, you’re only entitled to $14 off of your taxable income, which does only translate into $3 off in taxes… but every single dollar saved in taxes is another dollar in your pocket.

We know that saving money in taxes isn’t the sexiest way to save money, but we also know that every dollar you can save is a dollar that you can put towards some other expense or investment in your life. Save money with community service today!

Time To Get Tax Refund: Talk To The Taxman Now To Save Taxes Later

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Time To Get Tax Refund: Talk To The Taxman Now To Save Taxes Later: Saving taxes is on the minds of everyone, but unfortunately, no one really starts to think about that topic until next March or April when your 2011 Income Tax Return will be due. However, if you talk to a taxman or some form of an accountant right now as we head into the fourth quarter of 2011, you might be able to save a whole heck of a lot of money by saving taxes come April 15th!

Find A Taxman Right Now To Help Save Taxes!
Check Out: Tax Survival Guide!

The best way that you might be able to save taxes is by putting money into an IRA or into your company’s 401(k) (or 403(b), or some various 400 device that acts as a retirement vehicle). The money that you invest into an IRA (up to $5,000 or $6,500 if you’re over the age of 50) or a 401(k) (up to $16,500 or $22,000 if you’re over the age of 50) is considered to be tax deferred money. That means that you don’t pay taxes on that money now, but you have to pay taxes on it when you utilize the money after you retire.

If you were to put away $5,000 into your IRA or 401(k) and were at a 15% tax bracket (which, in 2010 was up to $34,000 for single filers and up to $68,000 for joint filers), you would save $750 in taxes. Though you don’t have access to that $5,000 any longer until you reach the age of 60.5, you also aren’t giving Uncle Sam that money.

Many people with disposal income that are in high tax brackets such as the 33% bracket or the maximum, the 35% tax bracket will often put away the most money that they can into a 401(k) or some sort of retirement device, not necessarily for the purpose of putting money into retirement plans, but for the purpose of saving money in taxes.

Another item that your accountant or CPA will probably talk with you about now is tax planning. Though the tax code for 2012 hasn’t been written yet, CPA’s will have a reasonable idea of what the tax codes will look like and will be able to show you approximately where you stand with your tax return for 2011. Especially if you are on a straight salary, your tax preparer will be able to tell you if you are having enough withheld from your paychecks in Federal Withholding Tax, or whether you have too much being withheld. The best job your tax preparer can do for you is to make you owe the most money possible without you owing penalties and interest.

And why is that? Though you may think that it’s a great deal to get a tax refund in the Spring, think of that as a loan that you gave to the government… interest free! If you had access to that money all year long, at least you would have the use of the funds and could appropriate them as you desire, and then give Uncle Sam his share of the money.

In October, November, and the beginning of December, your tax preparer also doesn’t have all that much going on. He can take more time with you to discuss the very specifics of your tax return and answer any and all of the questions that you have. Your accountant or CPA is likely to find even more items that you are able to use as a tax deduction if you bring them up in a November meeting than he or she might be able to do in March or April when you do your taxes.

So be sure to call up your taxman today and make an appointment to go see him or her to make sure that everything is right with your income taxes. Save taxes today by contacting your CPA!