Income Tax Service
5200 W Market St
Greensboro, NC 27409
336-852-9505
Terry Hough
President
December 16, 2013
Here are a couple of year-end tax tips.
First a notice, please mark down our phone number in your records.
The phone number shown in the Yellow Pages for ElectroFile is incorrect.
Please use
336-852-9505
to reach us.
That is the correct number and has been for over 25 years.
Please use 852-9505 anytime you need to talk with us.
Donate from your IRA (if you are at least 70½ years old)
If you plan to make cash contributions to your favorite charity in the near
future and are at least 70½ years old, consider making your donation directly
from your IRA. While it’s true you could take the IRA distribution, donate the
money, and take an equivalent tax deduction, sometimes it doesn’t quite work
out that way. You could end up on the short end of the equation if the
withdrawal causes more of your Social Security income to be taxed, or reduces
your medical deduction because your adjusted gross income is higher. And you
may not have enough deductions to itemize anyway; then the deduction is lost
completely. Donating directly bypasses all those unintended consequences. It
may even satisfy your required minimum distribution.
But hurry -- this tax benefit expires at the end of 2013.
Pay attention to when you pay your medical bills
The now-10% floor for medical expenses (still 7.5% if you’re older than 65) can
be hard to reach. By planning out your expenses to lump them together, you can
get more bang for your buck. For instance, you can accelerate some expenses
into this year, or delay into next, and do the same at the end of next year so
that larger amounts fall within one year.
Pay college tuition early
The American Opportunity Credit gives qualified taxpayers up to $2,500 each
year for the first four years of a college education. To get the full $2,500
you need $4,000 of qualified educational expenses (paid during the calendar
year, not the school year). For many schools, it’s no problem coming up with
that and much, much more, but if your child goes to school at a community
college or perhaps just one semester at a state school, you might be short. You
can count tuition paid by loans, but not by scholarships or grants, so if your
child received those, that can leave you short as well. You don’t want to leave
money on the table if you can help it! Consider paying next semester’s tuition
in December, or at least enough of it to get the maximum; tuition paid in the
current year for semesters beginning in the first three months of the following
year is eligible for the current year credit.
All information provided is general in nature and intended to create awareness,
not to address the specific circumstances or concerns of any individual or
entity. Although we try to provide correct and timely information, we cannot
guarantee the accuracy of any information or that such information will
continue to be accurate in the future due to the changing nature of the tax
laws. Before acting on any of the information provided here, you should consult
with a professional advisor who knows all of the unique facts and circumstances
pertinent to your particular situation.
Terry Hough