Year End Tax Tips Could Help You Cash in
In the muddled world of tax returns, uncovering every possible write-off could make a major difference in whether you pay taxes or collect a return.
"If your adjusted gross income is too high, you're going to lose deductions,” said Anchorage Accountant Michael Hanrahan.
He recommends keeping detailed receipts of items that you've donated, and suggests doing a little extra homework on how much those items are really worth before you part ways with them.
"There's publications out there that give you fair market value for donated items,” said Hanrhan. “I found out that because my suit was a designer suit, I could have taken a write-off for $300, [but] I took a write off for 30 bucks."
Anchorage-area Salvation Army drop-off locations are expecting an increase in donations as the year winds down.
"We give you a receipt [and] we fill it out with the items that you have donated on the receipt,” said Salvation Army Spokesperson Debra Lindsay-Hudgins. “We give you a couple of copies of that for your records.”
The list of missed write-offs runs the gamut, from non-cash charitable donations to out-of-pocket expenditures for charity that aren’t reimbursed.
Even the taxes you pay for your vehicle's registration and the state's employment security fund can count.
Hanrahan says there are some new taxes to keep on your radar this year, including a 3.8 percent net investment tax for people making more than $200,000 on additional income from sources like rent, capital gains or past business interests.
"We have the additional .9 percent Medicare tax on people who earned income from a business, or in excess of $200,000 for a single person."
Hanrahan says keeping detailed records throughout the year can make adding up these deductions a lot easier come tax time.
"A hundred here, a hundred there, yes, it can add up."
Also new this year is a fine for people who don’t have health care. That penalty can be assessed under the Affordable Care Act, but under the law, the IRS cannot collect the fine itself.
(Copyright © 2013, KTUU-TV)