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Sallie Mullins Thompson, CPA PLLC

Navigating Your Financial Life Through Effective Tax Strategies

 

2017 Tax Season: What should you know?

| January 12, 2016
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IRA Contributions

  1. You have until April 15 to make your contribution.
  2. You can contribute up to $5,500 for 2016.
  3. If you are 50 or older you can contribute and extra $1000 each year.
  4. Even if you do not work and your spouse is covered at work, you can still contribute as long as you do not contribute more than the income you and your spouse report to the IRA.
  5. IRA contributions are an excellent way to reduce your tax liability.
  6. If you have too much income to make ROTH IRA contributions, contribute to a Traditional RA, even if it is non-deductible. Then, a few days later, make a ROTH conversion from your Traditional IRA.


Tax Tip # 1 – Business Owners: Do you know that if you claim an itemized home office deduction, you can deduct on a prorated basis (home office % allocation) expenses such as: housekeeping, lawn maintenance, snow removal, pest control, carpet/window cleaning, and homeowner association fees? This is in addition to the more well-known ones of mortgage interest, home repairs, utilities and homeowners insurance.

Tax Tip # 2 – Individual payers: Do you know that a deduction against your AGI (on page 1 of 1040) has more power than one on Schedule A: Itemized deductions. So, if you have a choice, go for the one that can be deducted against AGI. An example is Foreign Taxes Paid, so be sure to choose the method that allows the AGI deduction.

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Disclosures:

Insurance products offered through H.D. Vest Insurance Services
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SMT CPA PLLC is not a registered broker/dealer or independent investment advisory firm

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