Five Tax Tips: Past, Present, Future - Midlife Finance

?Doing income taxes sucks,? announced Daughter #1. I agreed with her, then?resisted the urge to add sarcastically, ?Welcome to adulthood.?

?If you?ve been Johnny-on-the-spot and kept careful records every month all year long, feel proud ? and smug. Tax preparation should be fairly easy for you. If, on the other hand, like most of the civilized world, you?ve had good intentions ever since last April 15, but not a lot of follow-through there?s work to do. Here are some tips that should help ? not just for 2012, but in the future. (Warning:?I?m not a tax professional. If you have any questions, run them by an accountant or other income tax specialist. Or call the IRS.)

*File for free.?If your AGI, or Adjusted Gross Income, is less than $57,000, you can do your taxes online for free. Thanks to an arrangement with the IRS, 15 different companies are offering their fill-in forms, plus help. For no cost! (Your age or state residence may also get you in on this program. An estimated 70% of the U.S. population can qualify.)??Find out more here.?

*Credit cards can be helpful for cataloging last year?s business expenses?? even if you haven?t kept specific track during the year. Every time you?ve stopped for something eat while on business ? it?s deductible. Every time you purchased paper, ink or shipping tape for the business ? deductible. And where will these purchases show up, even if you?ve lost the receipt??On your credit card statement.

*Mileage may not seem like much ? but it adds up.?Here are the 2012 rates from the IRS:

• 55.5 cents per mile for business miles driven
• 23 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

2013 rates are a cent more for business and medical/moving expenses ? but the same for volunteer service.

Use credit card receipts to remind yourself where you?ve traveled on business ? or for appointments. (Mapquest.com is a big help here. From now on, resolve to keep a small notebook and pen in your vehicle, from now on, to record mileage numbers.) If you have a regular volunteer commitment (say, nursery duty at your church every other week, or helping out at the local food pantry), check your calendar, then Mapquest ? voila, mileage!

*Donated items also add up.?That old quilt, painting or set of dishes from your grandmother could be a valued item to a charity. If you?re not sure of value, the easiest way to find out is to visit a qualified appraiser. There are a number of national groups that can help ? quilts and other textiles, for example, are well handled by members of PAAQT (Professional Association of Appraisers ? Quilted Textiles). A Google or other word search should bring similar groups up quickly.? (Ask questions ? appraisers should be more than willing to provide certifications, training and other credentials. Look for the words ?certified,? as well as the magic phrase from the Appraisal Foundation ? ?USPAP.?)?Professionals? appraisal fee, by the way, is also tax-deductible.

If the value of your piece is $500 or less, technically you don?t need an appraisal ? but if it?s valued at $5,000 or more, you definitely do. Keep an eye on the calendar, though ? the appraisal must be done?60 days or less before the actual donation, according to the IRS. (The IRS? Form 8283 should answer any other questions you might have.) It?s too late for 2012 ? but perfect timing for this year. (Note: I know this area well, having been a personal property appraiser for years, and a member of PAAQT for more than a decade.)

Public charities can benefit from smaller-value items, as well. Gently-used items like clothing, CDs and books can really add up, when you?re donating a bagful or two. Check with your local thrift shop, library, senior center or other charitable group for what they?re interested in ? and what they?re not. (This writer does not, however, suggest that you, like then-Arkansas governor Bill and wife Hilary Clinton, donate your used underwear, at $2 a pop!)

*Age 50 or older??AARP not only has trained volunteers waiting for your call; they?re also willing to meet with you.This article not only gives you specific info, but offers up ten tips for tax deductions you may not have thought of.?Case in point: long-term care insurance premiums. According to AARP, the older you get, the more you can deduct. For ages 40 or under, the maximum claimable amount is $350; 41 to 50, $660; 51 to 60, $1,310; 61 to 70, $3,500; 71 or over, $4,370.

?? And if you can?t finish in time? There?s always the opportunity for file for an extension. Good luck ? it will soon be over.

Source: http://midlifefinance.com/2013/03/five-tax-tips-past-present-future/

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