Testimonials
From the period 1998 to 2009 Nive Dhanak and Jack Blanton handled our corporate and personal tax accounting. Their work was consistently punctual, accurate and reflected a balanced understanding of the intricate relationship between our personal and business taxes. |
Please accept this letter with sincerest thanks on a job well done! It surprises me everytime when you consistently raise the bar and surpass my greatest expectations on the Preparation and Planning you provide for me and my company on both Personal and Business levels. You help ease the fear and build the confidence in moving forward day in and day out! |
| Itemized Deductions |
Itemized deductions are captured on Schedule A as an alternative to taking the standard allowable deduction. To determine which is more favorable for your situation, it is often best to calculate your return both ways. Generally, if you own your own home you will itemize deductions. To help you gather and retain the correct records, a checklist is provided here for your use. While the list is not comprehensive, it is a good starting point.
Medical & Dental CostsMedical and Dental expenses are generally deductible to the extent they exceed 7.5 % of your income. Some of the more common expenses:
TaxesThe following taxes are generally 100% deductible.
*You may deduct either general state/local sales tax or state/local income tax. It is a good idea to save receipts substantiating major purchases involving sales tax. Interest ExpenseWhile most personal interest is no longer deductible (credit card interest, car loans, and the like); there are still interest expense deductions available to you.
Charitable Contributions (donating money or property)Both cash and property are generally deductible if donated to qualified organizations. Qualified organizations include:
Tax$aver Tip: All cash donations now require a bank record or receipt. Tax$aver Tip: Make sure you also keep track of your mileage to and from the charity. It is also deductible. Tax$aver Tip: Only donate your vehicle to a qualified charity that uses, improves, or sells the vehicle at full market value. If the charity sells your vehicle without using or improving the vehicle, your deduction is limited to the gross proceeds from the sale and not what could be a higher “fair market value”. Casualty and Theft LossesCasualty and Theft losses are generally deductible to the extent they exceed 10% of your adjusted gross income, are not reimbursable via insurance and each event exceeds $100.
Miscellaneous DeductionsMost miscellaneous deductions are only deductible to the extent they exceed 2% of your adjusted gross income. Items with an “*” are usually not subject to the income threshold.
Non-Deductable ExpensesThe following items are common non-deductible items:
Tax Savings TipsTax$aver Tip #1: Expense Shifting Whenever possible shift expenses into categories of itemized deductions to surpass the IRS thresholds in a given year. Example: You have surgery during the year resulting in high medical costs for that year. The IRS 7.5% of income threshold is surpassed, so every incremental Medical and Dental expense is now deductible. If possible, now is a good time to get eyes checked, to get family physicals, and to get other medical and dental work completed. Next year you will again have to reach the 7.5 % threshold before you can deduct the expense. Tax$aver Tip #2: Miles, Miles, Miles Capture all your mileage for business travel, charitable travel, and medical travel. Keep a log book in your car and note the miles to and from the doctor or dentist. Track the miles to drop off charitable donations, or to go to and from your charity. This area of deductible expense is often not taken or is poorly captured. Tax$aver Tip #3: Missing a few things What is deductible? What is not? When in doubt, save the canceled check, the proof of payment, and receipt. Without the proof, the expense cannot be taken. Tax$aver Tip $4: Non-cash donations How many times have you dropped off a bag of clothes and not kept a record of the gift? All of these donations that are in good or better condition are deductible. Keep a list of items you plan to give away. Put the list next to or inside the bag of items you plan to drop off. The required itemization of items donated can be prepared when the bag is ready to be dropped off at your favorite charity. Tax$aver Tip #5: Donation Traps You must now have a bank statement, cancelled check or receipt for all cash donations. So, write checks to your church versus cash in the collection plate. Send in a check to the Salvation Army or favorite charity instead of putting cash in the kettle. Should you have any questions or concerns regarding your situation please call. |