Miscellaneous Itemized Deductions — If your total miscellaneous itemized deductions, such as employee business expenses, investment expenses, and tax advice and preparation fees, subject to the 2% of AGI floor are close to or more than 2% of your AGI, consider whether you need any items in these categories and purchase them before the end of the year. If the total of these expenses isn't close to or more than 2% of your AGI, postpone these expenses until 2010 if possible.
Medical Deductions — Keep track of your unreimbursed medical expenses all year long. You can deduct them only if they exceed 7.5% of your AGI. If you think you're close to the 7.5% requirement, consider having an elective or necessary procedure before the end of the year. (Be sure to check that it's among the qualifying deductible expenses.)
Retirement Contributions — One way to lower your taxable income for the year is to contribute to or open a retirement plan, such as a 401(k), 403(b), deductible IRA, SIMPLE IRA or SEP. You could have made contributions for your 401(k)s and 403(b)s up until Dec. 31, 2009. But you have until April 15, 2010, to make a contribution to an IRA.
Top Ten Tips for Last Minute Filers
IRS Tax Tip 2010-62With the tax filing deadline close at hand, here are the top 10 tips the IRS wants you to know if you are still working on your federal tax return.
- E-file your return Don’t miss out on the benefits of e-file. Your tax return will get processed quickly if you use e-file. If there is an error on your return, it will typically be identified and can be corrected right away. E-file is available 24 hours a day, seven days a week, from the convenience of your own home. If you file electronically and choose to have your tax refund deposited directly into your bank account, you will have your money in as few as 10 days. Two out of three taxpayers, 95 million, already get the benefits of e-file.
- Review tax ID numbers Remember to carefully check all identification numbers on your return. Incorrect or illegible Social Security Numbers can delay or reduce a tax refund.
- Double-check your figures Whether you are filing electronically or by paper, review all the amounts you transferred over from your Forms W-2 or 1099.
- Review your math Taxpayers filing paper returns should also double-check that they have correctly figured the refund or balance due and have used the right figure from the tax table.