Friday, February 8, 2013

5 Ways to Maximize Your Tax Deductions

What's on your mind these day? TAXES? Itemizing tax deductions can be a booger! I've itemized our return for 27 years. It's finally easy because of one thing....ORGANIZATION. Here's 5 ways to maximize your tax deductions through organization:

ItsDeductible Screenshot
  1. ItsDeductible Online. The free online program gives donations like clothing, household items and electronics an IRS-approved value. It also tracks other cash, stock and mileage donations plus  exporting to Turbo Tax rocks. If you don't use a tax program no worries. You can use it to value your donations and print out the information to give to your tax professional for FREE!
  2. Hunt for deductions. Get out your magnifying glass like Sherlock Holmes. When it comes to taxes, it's not elementary my dear Watson. You can help your tax professional get your biggest refund! They file what you bring to them. Search this list of IRS deductions to make sure you haven't missed any.
  3. Save receipts for expenses. For example, the gas it costs you to drive to your doctor's appointments is deductible. You can deduct the actual cost you pay for gas, parking fees and lodging if you stay overnight. Don't guess if you can use it or not. Keep ALL your receipts and let your tax professional figure out whether to use them or not. 
  4. Keep a spreadsheet. It's so easy to post entries to a spreadsheet or paper journal as you go. Set down, go through your checkbook at the end of each month posting deductible cash payments. Items such as medical expenses, donations, IRA contributions, state and local taxes and others. You'll spot these easily after you review the IRS deductions list in #2.
  5. Get a tax envelope. Place all your receipts in the envelope. Store it for easy access and try not to forget where you put it. Each time you get a receipt, put it in the envelope. Everything will be in one place when January 1st rolls around.
    Excel Spreadsheet
Plain Brown Envelope
Exercising these five simple steps takes some of the stress out of tax time. WooHoo! You just eliminated rummaging through stacks of paper to find important information about your year (that you've forgotten). Do the Happy Dance to your envelope, print or thumb-drive your spreadsheet and ItsDeductible info and you're off to the tax preparer as soon as your W-2's are available. Month-by-month organization ensures you don't leave any of your money on the table for the IRS to pocket. It's a great feeling!

What ways do you maximize your deductions? Leave me a comment and feel free to share this with your friends on face book!

This is my favorite tax software.

Awaiting a refund,
The Happy Handicap

No comments:

Post a Comment