Has anyone talked to you about bunching deductions? There are times that you may not qualify for more than the standard deduction, but if you can bunch your deductions in alternating years, this may allow you a bigger deduction. Say your total itemized deductions are just under the standard deduction; if you bunch your medical deductions, contributions, make an extra mortgage payment, etc, maybe in alternating years you may have enough deductions to get more than the standard deduction. This could also work if you itemize but just miss a medical deduction or a miscellaneous itemized deduction because of the limitations (7.5% of AGI on medical, 2% of AGI on misc.) Bunching these deductions will take some planning and you may not like your cash flow if you have to pay some things early to qualify, but saving some taxes may make this worth looking at
Brian’s Tax Musings
Does everyone know about Tax Freedom Day? That is the day you stop working to pay taxes to our federal government and can actually make money for yourself. This year Tax Freedom Day was April 12, three days earlier than last year. Here is a little more info:http://www.taxationinfonews.com/2011/04/april-15th-the-us-tax-freedom-day/Now we can make money for ourselves for the rest of the year! (Of course, tax filing day was yesterday – when a lot of people owed some of those taxes they had worked 102 days to pay.)
Brian’s Tax Musings
Guess what? On Thursday, President Obama signed HR 4, the Small Business Paperwork Elimination Act, into law. So there goes all that additional 1099 reporting requirements for businesses. Here is more info:http://www.tradeonlytoday.com/home/511079-obama-signs-1099-repeal-into-lawWell there is one less thing for small businessmen to worry about. Now you can worry about your business, death and taxes (all the normal stuff.)