Tax Tips view all tips

Fast Facts

1. Don’t forget to provide your tax preparer with a log of your business, medical, and charitable miles. Following are the 2009 standard mileage rates:
• 55 cents per mile for business
• 24 cents per mile for medical
• 14 cents per mile for charitable

2. If you receive a notice from the IRS, don’t assume that it’s correct and automatically pay the amount shown on the notice. Many IRS notices just require you to give the IRS additional information to show why you do not owe the additional taxes or penalties. Always consult with your tax preparer when you receive notices from the IRS.

3. The costs for weight-loss programs can be deducted as a medical expense if the taxpayer is diagnosed by a physician as obese or suffers from some other ailments, such as hypertension, where weight loss would relieve the medical condition. However, the cost of any food is not deductible.

4. Go to your tax appointment well organized. Have all your income statements such as W-2s and 1099s separate from your expenses. Make sure you have all the proper social security numbers and birthdates for dependents, as well as their names as they appear on their social security cards. Careful organization will save you time come tax season.

5. If your tax refund was too high or too low, adjust your withholding so it doesn’t happen again next year. You can file a revised Form W-4 with your employer at any time to increase or decrease the number of exemptions you claim. The more exemptions you claim, the less tax your employer withholds from your wages, resulting in a smaller refund. Decreasing the number of exemptions results in more withholding and a larger refund.

6. It doesn’t appear that a college education will get cheaper any time soon. Look into establishing a qualified tuition plan for your children. The earnings in the account grow tax-free. As long as the funds are spent on qualified education expenses, there are no tax consequences. Plus, there may be an added tax benefit at the state level.

7. Are you planning on making any substantial gifts? Talk to your tax preparer first. Gifts with values exceeding $13,000 must be reported to the IRS.

8. If your child has earned income from a summer job, you may want to consider opening an IRA for him or her. There is no minimum age for contributing to an IRA. The only requirement is that the person making the contribution has earned income and has not reached age 70½.

9. Your cost basis in mutual fund shares and/or stocks includes reinvested dividends.