Your Money Matters: Tax tips from Cliff Morgan
The $250 above-the-line deduction for school teachers – no doubt, by now, you’ve already spent more than this for your classroom and students. In fact, you probably have excess costs which you will report as itemized deductions.
In 2013, we have a $4,000 above-the-line deduction for certain education expenses.
The deduction for state and local sales taxes was a boon for folks living in states without an income tax. It leveled the deduction playing field with residents of states with income taxes. With this benefit about to expire, this month is a good time to buy high-ticket items that you were going to buy anyway. Like what? Buy a new car, boat or big-screen television or monitor after the Christmas rush. You’ll get a good deal (especially on last year’s models or dealer’s loaners).
The deduction for mortgage insurance is disappearing next year. There’s not much you can do about this, except to make the January payment in December. You’ll get one final bite at that apple.
Seniors who face the required minimum distribution rules have benefited from a special deal which has been extended repeatedly for the last couple of years. You could draw up to $100,000 from your IRA account and donate the funds directly to your favorite charity. This draw would benefit you in several ways:
– You would not have to pay taxes on the amount withdrawn.
– It would qualify as your required minimum distribution (RMD) for the year – if the amount drawn was higher than the RMD.
– It would reduce the amount in your IRA so your heirs would face somewhat less in taxes upon your death.
– Folks who normally tithe to their preferred charities could use IRA monies to fund their tithes.
– There is no charitable deduction for these donations.
Strategic Wealth Inc.