Deductions

Successful tax planning includes a review of your available deductions and the impact of your filing status on your option to itemize. It is important that all of the technical requirements for your deductions are met. In addition, certain items are deductible only to the extent they exceed a percentage threshold. By reducing your adjusted gross income, you increase the amount of itemized deductions you can claim, because the floor limitation amounts are reduced accordingly.

A strategy commonly used in year-end individual tax planning is to determine the best timing for claiming itemized deductions. Generally, it is beneficial for taxpayers to defer income and accelerate expenses. This strategy may enable you to itemize your deductions if you claimed the standard deduction in the past.

Over the years, the IRS has seen numerous taxpayers attempt to claim deductions for non-cash donations which are essentially worthless. As a result, the level scrutiny these deductions are being given has greatly increased.

We have prepared a worksheet to help you document your non-cash deductions. Take photos of your items, fill out the form, and then have a representative sign your sheet when they are dropped off.

Download the worksheet here: /cache/normal/www.famiglio.com/CPA-Firm-Tax-Downloads/non-cash-donation-contribution-worksheet_.html<

Note that past a certain dollar amount you will need an independent appraisial, as well as a completed Form 8283 - Noncash Charitable Contributions<.

Even though every tax return is different, some tax rules affect every person who may have to file a federal income tax return. These rules include those covering dependents and exemptions. The IRS has issued important facts about dependents and exemptions, and reminds parents of the tax benefits for children.

Exemptions reduce your taxable income.<

There are two types of exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,700 on your 2011 tax return.

Your spouse is never considered your dependent.<

On a joint return, you may claim one exemption for yourself and one for your spouse. If you're filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer.