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Article: 10 Tax Tips

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The deadline may be two months away, but now is the time to start think about your taxes.

By now most people have received their W-2's an other official documents from their employers. If not, you need to call and get that information as soon as possible.

Once you have all your paperwork, it's time to dive-in! But knowing the tax laws changes for 2003, as well as some of the overlooked deductions, can mean a bigger refund back from Uncle Sam.

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To do your taxes, first you've got to get prepared.

"If people are thinking about doing their taxes, the first thing you want to do is gather up all you records," says Lola Murrell of Jackson Hewitt. "Make sure you have all of the receipts that you might use.

But receipts may not mean much, if you don't know how to make them work for you...especially if you itemize your deductions.

"You need to keep track of everything you're going to list as you itemize, things like business expenses, travel expenses if they're in business, your mortgage insurance," says Murrell, "even medical, if it's high enough."

This year Uncle Sam is giving some tax breaks like that old marriage penalty.

"They increased all standard deductions, but they took out the marriage penalty," says Murrell. "A married couple filing jointly now have the same deductions as two single people."

With standard deductions increased, some people who itemized before may be better off not doing so now. "you do need to calculate," says Murrell.

If you have children under the age of 18, you definitely need to calculate.

"One thing that people will have to deal with is the child tax credit," says Murrell, "especially if they got an advanced child tax credit check in the summer."

That check last summer was an advance on your 2003 return, so that means if you got that check for $400 per child, make sure you subtract that amount from any refund or add it to any amount you owe.

Otherwise Murrell says "If they file electronically, it will be rejected by the IRS and it will have to be refiled." For those who file by paper, Murrell says your return will be recalculated by the IRS and the $400 subtracted from the refund.

If your children are in an after-school program or a daycare center, you may be eligible for additional child care deductions.

Even if your child is in college, write-offs are still available. The tuition you're paying may be deductible, as well as the interest on a student loan.

And who could soon forget Hurricane Isabel? Uncle Sam hasn't. In fact, if you shelled out cash to pay for damages, that too may earn you a deduction.

"There are deductions for casualty losses," says Murrell. "There are limits. It's limited to a certain percentage of your income and it's limited to a certain amount of loss. If you had insurance that also paid for the loss, you can't count anything other than what your insurance company did not pay for."

A hurricane, theft or a car plowing into your house - all types of casualty losses may earn you a write off.

Many of us donated goods and services to help others in the wake of Hurricane Isabel. If that's the case for you, don't forget to itemize those charitable deductions.

If you are a sales rep, or have another profession that requires you to use your own car for work purposes, the mileage you incur can also be itemized.

"That does not included commuting back and forth," says Murrell, just the mileage "you actually drive your car for your work." She suggest that anyone in this situation keep a log of their work-related mileage.

Lastly, trying to get healthy can also improve your tax situation by itemizing your medical expenses.

"There are several additions to what you can claim as medical," says Murrell, "dieting, smoking sensation, if they have to do with your health."

But Murrell warns that the expense must really be for health reasons.

"If you are already slender and you go on a diet, that won't count. But if your health is in danger by obesity and you take a diet program and you have diet expenses, then that counts as a medical expense."

Taxes, of course, are complicated...but help is out there. Contact your tax professional or visit the IRS online at www.irs.gov.

Use the low cost e-file service from Tax Pros Online to file your tax return and get a rapid refund. Visit the Tax Pros Center at www.TaxProsOnline.com.

Also check out these tax resources:
Tax Tips Video


Doing Business Tax-Free: Perfectly Legal Techniques to Reduce or Eliminate Your Federal Business Taxes, 2nd Edition


Guaranteed Income for Life: How Variable Annuities Can Cut Your Taxes, Pay You Every Year of Your Life, and Bring You Financial Peace of Mind


Related Articles:
The Politics Behind U.S. Taxes
Tax Loopholes for the Super Rich - Shifting Tax Burden to the Middle Class

posted by Victor Lloyd Smith @ 1:39 AM