ElectroFile Income Tax Service   Income Tax Service
5200 W Market St
Greensboro, NC 27409
  Terry Hough, President Terry Hough

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 70Ĺ years old)

If you plan to make cash contributions to your favorite charity in the near future and are at least 70Ĺ years old, consider making your donation directly from your IRA. While itís true you could take the IRA distribution, donate the money, and take an equivalent tax deduction, sometimes it doesnít 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 youíre 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, itís 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 donít want to leave money on the table if you can help it! Consider paying next semesterís 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.

Tips on itemizing your charitiable deductions

Please take a look at our April 02, 2013 newletter entitled Nine Tips on Deducting Charitable Contributions .

Other tips and important information

You may also want to review the entire list of our newletters by clicking here

We wish you a Merry Christmas and a Happy New Year. We look forward to seeing you soon!

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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.

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