eSDee

Hey all this is the first time I have posted in this forum because basically I am a financial n00b. I always just take the standard deduction but since I moved into a higher tax bracket I am wondering what I can do to help myself out. I don't own any property although I plan to buy sometime this year. I am not married and I don't have any kids. Obviously I should go to a tax agent to find out specifics but can you guys/gals tell me anything off the top of your head that I might be able to deduct, like gas or rent or beer money?

Thanks!

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brainsmile

get married and have 10 kids

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Jeffbx

If you have no dependents, no real estate and hopefully no high medical bills, you're probably going to be better off taking the standard deduction. You typically have to have a high amount of deductions (thousands of dollars worth) before it makes more sense to itemize. I think most people begin to itemize when they buy a house & suddenly have a ton of interest expense - I know that's what did it for me.

Cubsfan

Sounds to me like the best way for you to save/make money is to go buy TurboTax instead of going to an accountant. You sound like me, basically nothing besides work's W-2 and maybe some bank interest. Turbotax makes it a breeze to take care of this stuff.

ray

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eSDee

Thanks everyone!

zippyjuan

Get a copy of the long form and see what is best. But it does sound like you will do better with the automatic deduction. I do recomend not to use one of those "instant refund" deals if you are getting money back. Just use the Direct Deposit option and it will be there quick enough- why pay someone to get your own money back a few days earlier? If you owe- wait until the end to pay- no use giving it up sooner than you have to. I don't use any accountants or software- just do it all myself (long form). Don't forget if you do itemize that you can take up to $250 for charitable contributions before you need to document it. Claim the whole thing- unless of course you can prove more.

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eSDee

Can you claim work done for charitable organizations? I created and am still updating a website for a non- profit for free. I know it have put alteast 40 hours into it. Can I claim that at all?

ray

In CANADA you can get the company you're doing this for to give you a 'tax receipt' which you can then claim. But here's the catch. You have to file your return like you earned $xxx and then donated that $xxx back to charity. Therefore, you would have to report BOTH the income and the deduction.

However, in AMERICA, you cannot deduct SERVICES but you can deduct for EXPENSES related to such charitable/pro bono services.

cheapie

i'm gettin' PAYD!!!! this year. over 3k. and i already claim 6 deductions (is that what they're called?)

i tithe at church, got backpay last spring that had a ton of taxes pulled from it, had another kid, have 3 mortgages on 2 pieces of property, can deduct all of my snowboarding and mountain biking equipment and miles because i'm in the national ski and mountain bike patrol, and have some other charities that we've given to. oh yeah. poppa's gonna....sigh....put it toward the money we spend buying a van. sob.

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dbax791

EssDee - If you are thinking of buying property, do it now, or wait until Jan 2005. Reason being, if you buy late, your points and closing costs might not clear the std. deduction.

e.g. Buy now...$3000 closing + 10 mos @ 1500 = $18000 deduction = $5600 back in your pocket at tax time (at 30%)

Buy in November...$3000 closing + 1 mos @1500 < $4750 standard deduction so you get no benefit over what you would have gotten if you didn't buy property.

eSDee

ray - Damn Canadians.

DarkFury- you're right man I don't want to go out and start having babies just to get a tax break. I like my freedom!

cheapie- good for you man. I am looking to pay about 3.5 grand this year if I don't find any deductions

dbax- great tip there thanks

VTGreg

While it is always nice to receive a fat check from the IRS, it is actually better when you owe them money come tax time. When you get money back at the end of the year, Uncle Sam has had the opportunity to make money on that money instead of you. Try planning out what you will pay in taxes at the beginning of the year and claim more deductions so you owe more come tax season. That way you can put that money to work for you during the year.

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cheapie

yeah. i know. two years ago, i paid $11. that was perfect. each year i typically up my withholding to try to keep up with the additional kids, real estate taxes, etc.

this year i didn't go it quick enough. anyhow, i'm gonna like the extra coin!

VTGreg

Absolutely. It is always nice to get that big check.

ray

but as others have noted, sometimes it's better to be able to use that money during the year, rather than letting Uncle Sam earn off it.

guiseppewv

If you are going to actually do something useful with the money that is the best way. But I on the other hand try to always shoot for $2-$3k refund so I can put it in my ROTH IRA. So for me it is another way to save money b/c I never have the chance to spend that money.

ray

Very good point. I guess then it boils down to what a person really WANTS in life. People who want to save for the future will naturally put aside portions of the money no matter when they receive it. Then there's the group of people like us GotApexers who will spend spend spend when we see a great deal...