Top Ten Tax Tips

TOP TEN TAX TIPS

  1. Include your social security number on each page of your return so that if a page is misplaced by the IRS, it can be reattached.
  1. Double check that your social security number (and your spouse's, if applicable) is correct.
  1. Sign your return and include all attachments in the correct order specified.
  1. Make sure you choose the proper tax filing status for your return.
  1. If you are married, check to see if filing separate returns rather than a joint return is more beneficial.
  1. Don't miss the deadlines.
  1. Include social security numbers for all dependents who were born on or before November 30, 1997.
  1. If you are single and have a dependent who lives with you, check to see if you qualify for the lower tax rates available to a head of household or surviving spouse.
  1. Make sure you pay your "nanny tax" for all household employees earning more than $1,000/year.
  1. Check that you have claimed all of your dependents, such as elderly parents who may not live with you.

DEDUCTIONS TO REMEMBER

You can deduct fees paid to financial planners, IRS custodian fees, subscriptions to investments publications and the cost of safe-deposit boxes where you store securities or tax documents. Since these expenses are miscellaneous deductions, however, you can claim them only on Schedule A once the total exceeds 2% of your adjusted gross income.

Normally, you can claim your full charitable donations on Schedule A. If you got something back in exchange for your contribution, however, you can only deduct the excess value of your donation. For example, you paid $250 for tickets to a charitable benefit, but you received a pair of Bulls tickets worth $150. In this case, only $100 is deductible as a charitable contribution.

You can deduct health care costs for yourself, your spouse and your dependents only when the unreimbursed expenses exceed 7.5% of your AGI.

If you are self-employed, there is a way to make 100% of your health insurance premiums deductible. You can hire your spouse and have the health insurance be paid for by her. Since your spouse is an employee, 100% of the premiums are deductible. Your spouse must provide bonafide services your company. Many CPA firms advocate 40% of your health insurance premiums are deductible. Ask them about this idea!!!!!
Pape Financial Services, Inc.
9729 W. Grand Ave ~ Franklin Park, IL 60131~USA
Tel: 847.455-9500~Fax: 847.455.9501

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Last modified: April 15, 2003