1. If your health insurance has a deductible of at least $1000 (single) or $2000 (family), then you may qualify for a Health Savings Account! This may even be better for you than a medical flexible spending plan through your employer. AND, you may even be able to have both!
   
   
2. Tell your tax preparer about how much you contributed to a Traditional OR Roth IRA this year.  In the past Roth contributions didn't affect your refund, but starting on 2002 tax forms, reporting a Roth IRA contribution may lead to a larger refund! And, you have until April 15, 2005 to may an IRA contribution for tax year 2004.
   
   
3. Another important note about IRA's: in the past you could only contribute $2000 to an IRA, but in 2002 those limits went up to $3000 ($3500 if you are age 50 or over).
   
   
4. If your household had less than $24,500 in total income last year, you may be entitled to a Homestead Credit (Wisconsin full-year residents only), whether you pay property tax or rent! And, you qualify whether not you file an income tax return!
   
   
5. Taking advantage of flexible spending plans (medical and/or dependent care) can reduce your tax. Not only do they reduce your federal and state income tax, but can also reduce your Social Security and Medicare taxes -- and extra 7.65% bonus. Talk with your Human Resources Manager to see if your employer offers this. Worried about not spending the entire amount you set aside? Oftentimes, as long as you spend at least 70-80% of it you'll at least break even -- because of the tax breaks.
   
   
6. The first half of your property tax bill is due by Jan 31. Whatever amount you will pay by Jan 31, pay it in December! You get a tax break this year instead of next year.
   
   
7. In Wisconsin, careful about lumping too much property tax in one year! (This may be contrary to other advice you hear!) While lumping could help your federal income tax, it could hurt your state income tax. Wisconsin has a credit based on the first $2500 in property tax paid.
   
   
8. College-age children -- think twice before not claiming them. Some parents let the child claim themself, but oftentimes the child gets much less educational credits than the parent would have.
   
   
9. Keep track of those charitable donations and expenses! If you're already itemizing, for each additional charitable $100 recorded, you could reduce your taxes by $20 (sometimes more)!
   • Remember to keep track of mileage to/from volunteering, donating items at Goodwill, etc.
   • Each of those $5 donations to make to co-workers counts!
   • Do you buy candy/food/goods from co-workers who are fund-raising for their children? A portion of that is deductible, too!
   
   
10. Certain expenses can be recorded in one of several places -- make sure you are getting the largest credit. Example: some educational expenses for your job could be recorded on Schedule A (Unreimbursed Employee Expense), Form 8863 (Lifetime Learning Credit), or Schedule C (Self-Employment). Which is right for you? Depends on your situation!
    
    
11. Securities (stocks, mutual funds, etc) -- keep all statements for each stock together -- DON'T file them away at the end of each year. It will be much easier to determine your cost basis when you sell a security if all your statements for that security are together!
    
    
12. Securities -- when determining your cost basis, don't forget to include your dividend and capital gains distribution reinvestments in your cost basis. Remember, you paid taxes on these at the time of the reinvestment!
    
    

Have a question? Call me at (920) 609-7179 to discuss your tax situation!