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Some Tax Tips to Heed Ahead of the Deadline

Posted By Carole Fleck On February 28, 2013 @ 12:27 pm In Money Talk | Comments Disabled

The deadline to file your tax return is approaching, so it’s important you know how to get every refund, credit and deduction you can.

Here are some to consider:

  • Long-term care insurance premiums. The older you are, the higher the portion you can claim. Here’s the scale: Age 41 to 50, $660; 51 to 60, $1,310; 61 to 70, $3,500; 71 or over, $4,370.
  • Medical necessities. Did you know you can deduct expenses for things like hearing aids and batteries, artificial teeth, prescription drugs, oxygen and wheelchairs?
  • Home health aide. If you hired one to take care of your spouse or dependent, you may be able to claim a credit of up to $1,050 on up to $3,000 in dependent (or spouse) care expenses. That credit is shaved directly off your bottom-line tax bill; it is not a deduction from your taxable income.
  • Retirement account. If you contributed after-tax income to your retirement account, a percentage of your annual distribution may be tax-free.
  • Energy efficiency. Certain energy-efficient improvements to your home, such as installing a new roof, insulated windows or exterior doors, can get you a tax credit.

On the flip side, if you’re wondering about some of the less typical transactions that may be considered taxable income, here goes:

  • Gifts. If you bought your grandchild a car, and kept the cost to $13,000, you won’t have pay taxes on that gift – even though you were the giver. Go above that amount, and you’ll have to report that gift on your tax documents, according to GoBankingRates.com. Gifts that aren’t taxable include tuition costs, medical expenses and gifts to political organizations.
  • Winnings. So you were lucky at bingo? Pay up. Uncle Sam says winnings from bingo, casinos, dog races, horse races, poker tournaments, raffles and the like are considered taxable income. Even if you won a non-cash prize like a vacation, you must still report the market value on your tax forms.
  • Inheritances. If you inherited an estate that is worth $5 million or more, you will have pay an inheritance tax within nine months of the decedent’s death.

Photo credit: 401(k) 2013 via flickr.com

 

 


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