By Donna Wesling, CPA
It’s that time of year again – tax time! Here are some things to think about when preparing your tax return.

The standard deduction for 2010 is $5,700 for single taxpayers and $8,400 for head of household. If your itemized deductions exceed these amounts, then you may save income tax by itemizing your deductions instead of taking the standard deduction. If you own a home debt free and you don’t have many itemized deductions other than property taxes, you might want to consider paying your property taxes in January and then paying the following year’s taxes in December so that two years of property taxes are bunched into one year. Then you can itemize deductions every other year and take the standard deduction in alternating years to minimize your income tax liability.

There is a deduction for out of pocket expenses paid by K-12 teachers up to $250. You do not have to itemize to be able to take this deduction.

If you incur child care expenses because you work, you may be eligible for a dependent care credit. The amount of expenses that can be taken into account is a maximum of $3,000 per child and up to $6,000 in total. The credit is between 20-27% of the allowable expenses, depending on your income level. Remember this is a credit and directly reduces the tax you owe. For example, if you have $3,000 of eligible expenses and qualify for a 20% credit, your income tax will be reduced by the resulting $600 credit.

If you or your dependents were enrolled in college during 2010, you may qualify for either an education credit or a deduction for some of these expenses.

There are, of course, many things to consider when preparing your return. These are just a few items that sometimes get overlooked. If you have questions, please feel free to contact me at donna@weslingcpa.com .

 

Donna Wesling is a CPA with over 35 years of experience in assisting small businesses and individuals with their tax and accounting needs. She is the owner of Donna Holliday Wesling CPA firm and is currently serving as chair-elect for the Texas Society of CPAS, one of the largest professional organizations for CPAs in the country.

 

Copyright  ©2011 Donna Wesling. All rights reserved.

IRS REQUIRED DISCLOSURE FOR WRITTEN TAX ADVICE:

THE ADVICE I PROVIDE IN THIS CORRESPONDENCE REPRESENTS MY BEST JUDGMENT AND SHOULD NOT BE USED BY YOU FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON YOU UNDER SECTION 6662(d) OF THE INTERNAL REVENUE CODE.  MY ADVICE IS AS OF THE DATE OF THIS CORRESPONDENCE AND IS LIMITED TO THE CONCLUSIONS I HAVE INCLUDED IN THIS CORRESPONDENCE.  THESE CONCLUSIONS ARE BASED ON THE INFORMATION YOU PROVIDED TO ME AS STATED BELOW.  MY CONCLUSIONS WOULD BE DIFFERENT IF ANY OF THE INFORMATION IS INCOMPLETE OR INACCURATE.  IN RENDERING MY ADVICE, I RELY ON THE TAX LAW, REGULATIONS AND THE CASE LAW.  THESE LAWS AND REGULATIONS MAY CHANGE AND ANY SUCH CHANGES COULD AFFECT THE VALIDITY OF MY CONCLUSIONS.  I WILL NOT UPDATE MY ADVICE FOR SUBSEQUENT CHANGES TO THE TAX LAW, REGULATIONS OR CASE LAW.

Copyright © 2010-2015 by Stella Singles LLC. All rights reserved.

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