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Last Minute Tax Tips - Save Money on This Year's Return
Added: 04/12/2004 Type: Summary Viewed: 978 time(s) [ Not Rated Yet ]

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Last Minute Tax Tips - Save Money on This Year's Return

Former Price Waterhouse CPA Jim Trippon, a tax and financial advisor to some of America’s wealthiest families, recently published the results of his study of how 537 millionaires save money on their taxes in his new book “How Millionaires Stay Rich Forever.”

Trippon says many millionaires take advantage of opportunities available under the tax law that most people overlook. Here are some of the best tactics he says everyone should consider before the April 15th deadline rolls along to reduce their taxes:

1.    IRA & SEP Contributions - For individuals under age 50 the maximum deductible contribution this year is $3,000 and for taxpayers over 50 the maximum deductible contribution is $3,500. SEP IRAs, which are available for many business owners can allow deductible contributions of up to $40,000 under the new EGTRRA rules.

2.    Education Credits - The two tax credits opportunities which offer a dollar for dollar reduction in your tax bill this year include: the Hope education credit which allows a reduction in tax of up to $1,500; and the other is the Lifetime Learning Credit which can reduce your tax bill by up to $2,000.

3.    Invest your early refund in a Roth – An often overlooked opportunity is the provision that allows early filers to use a tax refund received before April 15th to fund their previous years Roth IRA contribution. The contribution limits are the same as for regular IRAs. For individuals under age 50 the maximum Roth contribution this year is $3,000 and for taxpayers over 50 the maximum Roth contribution is $3,500.

4.    Deduct points on home refinance - Record low interest rates have resulted in a refinancing boom. Many taxpayers forget that the points paid on those new loans are deductible pro rata over the life of the loans.

5.    Child Credit – Don’t forget you can claim a tax credit of $1,000 for each qualifying child who was under 17 on December 31st.

6.    Tax ID for new babies - You must get a social security number for babies born during 2003, and put it on your tax return, in order to receive the benefits of claiming the child as a dependent or claiming head of household status.

7.    Job Hunting Expenses - Our changing economy has caused many taxpayers to be out of work or to seek better paying jobs. The tax law generally allows deductions for job hunting expenses, except for your first job and when changing professions.

8.    Health Coverage Tax Credit for Retirees and displaced workers – Some retirees and unemployed workers are now allowed a tax credit of up to 65% of the cost of their health insurance. Consult your tax advisor to review the restrictions.

9.    Small business benefits - Small business owners can expense equipment purchases of up to $100,000 under the section 179 of the tax code. This is a major increase from the previous rules which only allowed expensing of up to $24,000.

10.    New Dividend & Capital Gains Rules - One of the biggest benefits in the new tax law is the reduction in tax for dividends you receive from your investments and the capital gains upon their sale. For some taxpayers, this rule change will cut their tax liability by up to 60%

How Millionaires Stay Rich Forever: Retirement Planning Secrets of Millionaires and How They Can Work For You by Jim Trippon, CPA; Published by Bretton Woods Press LLC and distributed by Midpoint Trade Books; February 2004; 254 pages; $21.95; 6 x 9 Hard Cover - Cloth; ISBN: 0-9723389-1-8

Media kits and review copies available on request. Jim Trippon is available for interviews. To arrange an interview contact Sarah Choi at 713-661-3806 or call Jim Trippon directly at 713-661-1040.

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