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Tips from GTAX Gilman Ciocia on Financial and Tax Planning
Submitted by jeffreywalton7742
Mon, 28 Jan 2013
Did you know that if you have an individual retirement account (IRA), you can contribute for the previous tax year right up until the mid-April federal income tax deadline? Before April 17, 2013, you can still contribute to your IRA to reduce your taxable income for 2012. If you're looking for ways to lower last year's taxable income, putting some money into an IRA will help. For 2012 you can contribute up to $5,000 if you're under age 50, and $6,000 if you're 50 or older. This is a terrific way to help your tax situation and plan for the future.
Learn About Tax Credits for Education
Tax credits are great because they cut your tax bill on a dollar-per-dollar basis. The American Opportunity tax credit is worth $2,500 in 2012 for each qualifying college student in a family. This credit is good for four years of post-high school studies. You can maximize this credit if you spend at least $4,000 on books, tuition, and fees. It's available to individuals with adjusted gross incomes of up to $80,000 and married couples filing jointly making up to $160,000. This tax credit might not be around next year, but if you have educational expenses for 2012 you should learn about this tax credit.
Consider Charitable Giving if You Itemize
While new tax rules may change how big a deduction you get for charitable giving, it's still a good way to reduce adjusted gross income. If you make more than $250,000 as an individual, or if you and your spouse filing jointly make more than $300,000, the value of all your itemized deductions will be reduced by three cents on the dollar for every dollar of income over these thresholds. However, itemized deductions cannot be reduced under this rule by more than 80%. The rules are complex, so it's wise to work with your GTAX Gilman Ciocia tax expert when planning charitable giving.
Know Your Flexible Spending Account Options
Flexible spending accounts, or FSAs, help you pay for medical, child care, and dental costs with money set aside that is not subject to payroll taxes. The 2013 annual limit for FSAs is $2,500, but this number will go up each year based on inflation. The one disadvantage to using an FSA is that you lose any FSA funds not used by the end of the year. Therefore it's important to try to accurately gauge how much you'll be spending on things like orthodontia and medications over the year. Your Gilman Ciocia finance planning expert can help you devise the best estimate for your FSA.
Check for State and Local "Green" Home Improvement Initiatives
There are still tax credits available for home improvements and appliances that reduce your home's energy footprint. Typically, this tax credit is 10%, or up to $500 for purchasing and installing certain energy efficient appliances. Some products eligible for energy savings tax credits come with fixed tax credits. For example, the credit for installing certain types of water heater gets you a tax credit of $300. Gilman Ciocia finance planning experts are available to help you find all the tax credits you are eligible for.
With the recent tax changes put into effect, it's more important than ever to work with an expert, like gtax, Gilman Ciocia when filing yours this year. The Gilman Ciocia finance planning professionals will look at your entire financial picture, and then make recommendations on your taxes. To get expert advice about your taxes, go to gtax.com.
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