Archive for November 2014

TAX DEDUCTIONS AND TAX CREDITS: WHAT'S THE DIFFERENCE?

What is the difference between a tax deduction and a tax credit? A tax deduction is an amount that reduces your taxable income and, therefore, reduces your tax by your tax bracket percentage. If you have a tax deduction (such as a deductible Traditional IRA contribution, student loan interest, Health Savings Account contribution) in the…

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AUTOMOBILE MILEAGE TRACKING

Most people know it, but few do it or do it correctly. I am talking about tracking business mileage! Mileage is not always deductible. Mileage to and from your place of business, whether self-employed or not, is considered “commuting mileage” and not deductible. Once you are at your place of business, where you go after,…

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NON-CASH DONATIONS

Donating unwanted or unused items is a great tax deduction if you file a Schedule A and itemize on you tax return. There are several organizations that will even pick up these donated items for you! Here are some easy-to-follow tips regarding these donations: 1) Utilize a donation guide that helps you estimate the values…

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TAX RECORDS – HOW LONG DO I KEEP THEM?

A common question I get every year is, “How long to I need to keep my tax record for?” I tell my clients this: Keep seven years of tax returns and three years of backup documentation. The IRS can only go back three years to audit. However, if they suspect fraud, the IRS can go…

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APPROACHING THE END OF THE YEAR

Here we are, already in November! Now is the time to start thinking about tax-saving strategies to help save you money before the end of the year. For Arizona residents who itemize on their tax returns, a great way to save money is to donate to one of the several tax credits available to us!…

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