Tax Tips from CPA Jim Chaston

It’s that time of year. Some people dread it, I love it. Tax Time! Here are a few things to think about as you get ready to file your tax return:

1)    Defer income and accelerate deductions. This is generally the cornerstone of tax planning, push your taxes out as far as possible until your income is less or the value of the tax is less.
2)    Bunch itemized deductions. If you make your January Mortgage payment in December instead of January you get to take an extra month of interest.
3)    Retirement contributions. You can deduct contributions you make to a 401k or IRA. This is a great deduction as you can make an IRA up until April 15 of the next year.
4)    Watch for expired and/or extended deductions. Lots of deductions expire. Don’t try to take these deductions when they are no longer available.
5)    Home Office Deduction Safe Harbor. For the new safe harbor, just multiply the square footage of your dedicated office space times a factor and you are done.
6)    Tax credits make money off the government. Arizona has some great credits that when coupled with the federal itemized deductions, the taxpayer actually makes money off of the government.
7)    Organize your records. During the year keep a folder for all your tax documents.
8)    File and pay on time. When you file an extension, filing timely means filing by Oct. 15. But you still must pay by April 15.
9)    File electronically. Several years ago I came to the realization that filing electronically is actually safer than sending it through the mail. All of the services that send electronically use commercial grade security.