Tax Saving Tips for 2011

The filing deadline for 2010 tax returns is upon us, with tax returns due this Monday April 18th.  In order to help you be better prepared for 2011, below is a list ot tax tips to help you maximize deductions and minimize taxes.  Please be sure to send us a copy of your 2010 tax returns for our records in order to assist us in tax planning for 2011.

1. Know the tax system - We know this is easy to say but far too many people do their taxes without fully knowing what they are doing.  Read the entire guide, read up on yearly 2011 changes and make sure you understand why you are putting a certain number in a box.  If you don't want to complete your return yourself, hire an accountant to file your return.  Mistakes can cost you money.
2. Use software - Software is great for helping you file your taxes efficiently online. The extra help and clear instructions give you a better chance of ticking the right boxes and inputting the right figures.
3. Claim the extra work expenses - If you work for someone else it is unlikely that you ever claim expenses. However you are entitled to some deductions and you can check with the IRS to see what is eligible. Examples may be expenses you have had to pay out of pocket while attending meetings or business trips.
4. Find out if you are eligible for any tax credits – There are lots of tax credits available with new ones every year. Read through the requirements and see if you qualify for any of them.
5. Give to charity – If you plan to make any donations remember these are tax deductible. If you want to save from donations without spending actual cash you can donate old goods to Goodwill or Salvation army and receive a tax deduction.  Just make sure to get a receipt.
6. Max out your 401k account – Maximizing contributions to your 401(k) will ensure that you maximize tax savings.  The maximum remains unchanged  at $16,500.
7. Check out health care deductions - There are lots of changes in health care deductions as a result of the Affordable Care Act Tax Provisions.  For instance, the cost of an over-the-counter medicine or drug cannot be reimbursed from a flexible spending account unless it’s for insulin or you have a prescription.
8. Keep track of mileage — The mileage allowance changes again in 2011 to 51 cents-per-mile for business miles driven; 19 cents-per-mile for medical or moving purposes, and 14-cents-per-mile for driving for charitable organizations.  Be sure to keep accurate records, seriously.  :)

 Have a wonderful weekend and be sure to contact us or your tax advisor if you have any questions.