816-741-7882
Professional services with a personal touch.

« November 2012 | Main | January 2013 »

2 posts from December 2012

12/03/2012

Don’t Miss Out on These Overlooked Tax Deductions

Mistakes are easy to make, but missed deductions can cost you hundreds even thousands of dollars if not included on your tax return.

Don’t let a knowledge gap prevent you from taking advantage of these tax breaks shared by Kiplinger.

Don’t deduct state sales tax. This deduction expired at the end of 2011 and though some predict the right to deduct state sales tax will return in the future, it has not yet.  

Do subtract reinvested dividends. Though it isn’t officially a deduction it is something you can subtract that most taxpayers miss. If you use your mutual fund dividends to automatically buy extra shares, remember that each reinvestment increases your tax basis in the fund. That, in turn, reduces the taxable capital gain (or increases your tax-saving loss) when you redeem shares.

Confused? Don’t be. Call one of our 14 tax advisors here at McRuer CPAs.

8 Tax Moves to Consider Before Year End

History shows only that the markets tend to be volatile and unpredictable in the aftermath of close national elections. In election years since 1976, between Election Day and Dec. 31, the Standard & Poor’s 500-stock index has lost as much as 9.6 percent and gained as much as 7.6 percent. So if you’re stymied about which smart tax moves to make before Dec. 31, take heart.

At McRuer CPAs we know year-end tax planning is possible. We endorse these eight suggestions per the “Tax Moves to Make Now” article in the Wall Street Journal.

  1. Make an extra mortgage payment or pay down principal. This is particularly advantageous if you believe the mortgage-interest deduction will be reduced or eliminated next year.  
  2. Don’t fret about the alternative minimum tax “patch” for 2012. If Congress doesn’t fix the alternative minimum tax, eight times as many households will be subject to the tax as in previous years so chances are it will get done.  
  3. Use up funds in your medical flexible-spending account. These dollars often don’t carry over, although some employers will allow you to spend 2012 funds in the first few weeks of 2013.  
  4. Write next semester’s tuition checks before year end. The American Opportunity Tax Credit allows qualified taxpayers to get a benefit this year for next spring’s tuition if the payment is made before year end.  
  5. Make gifts up to $13,000 to relatives or friends. Such gifts are tax-free, and the number of recipients isn’t limited, as long as the maximum amount doesn’t exceed $13,000.  
  6. Contribute to a 529 education savings account. Assets in such accounts enjoy tax-free growth and withdrawals are also tax-free.  
  7. Have a closely held business pay a dividend. With the dividend-tax rate in flux, firms that are organized as C corporations but now are in Subchapter S format should consider paying dividends before year end.  
  8. Buy depreciable equipment for a closely held business. Both “bonus” and “Section 179” depreciation deductions are set to drop sharply in 2013.
RSS Feed

Welcome from Scott McRuer
& the McRuer CPAs Team

Scott McRuer
Learn more about Scott

Follow Scott and his team on your favorite social media

Facebook LinkedIn YouTube