Free Tax Tip #3: Maximizing Write-Offs
By Barry Steiner CPA (Former IRS agent)
Managing a tax burden has never been more difficult, whether you're managing your individual tax rates, the rates on your investments, the taxes on your privately held or pass-through business, or the income of executives and shareholders at your company. Lawmakers have been aggressively using the tax code to try to get the economy back on track, and there are now more ways than ever to reduce your tax liability – however, all of them take planning.
3. Try To Maximize Your 'Above-The-Line' Write-Offs
Above-the-line deductions are valuable because they reduce your adjusted gross income, and AGI is used to test whether you're eligible for several tax benefits. The most common above-the-line deductions are traditional Individual Retirement Account (IRA) and Health Savings Account (HSA) contributions, moving expenses, self-employed health insurance costs, alimony payments and bank penalties you may have had to pay for early account withdrawals.
Your Weekly Tax Jokes
"Tomorrow is the day to mail in your tax returns, which means tonight is the night to start making fake receipts." – Jimmy Kimmel
"When it comes to taxes, there are two types of people. There are those that get it done early, also known as psychopaths, and then the rest of us." – Jimmy Kimmel
"Today is April 1, April Fools' Day, a day that people try to fool their friends and relatives. Don't confuse that with April 15, when people try to fool the IRS." - Jay Leno
"Yesterday President Obama said, 'We can't continue to treat tax money like monopoly money.' Oh really – how come all those goes on Wall Street got 'get out of jail free' cards?" – Jay Leno
Click here to see previous Tax Tips from Barry R. Steiner. Check back next Wednesday night, 10 PM Central, for another free tax tip – one tip for each week of the tax season until April 17th.
Barry R. Steiner is a Chicago-based CPA and former IRS Agent. He's the author of the best-selling income tax guide "Pay Less Tax Legally" and was a regularly featured guest on ABC-TV's "Good Morning America". Barry has maintained his own tax practice for the past 40 years, and most recently has authored two e-books: "Infernal Residue" and "Kiss My IRS". More info at KissMyIRS.com »
