Saving On Taxes
Here is a checklist of some of the tax changes to consider, you’ll want to make a mental note or write them down for yourself. A lot of you are probably still waiting for your k-1’s. Don’t forget to always contibute to your retirement plans (IRA’s & Roth plans etc.) - very important!
FOR ALL OF US: You may be eligible for earned income credit, which increased in 2005, if you: Have more than one qualifying child and earn less than $35,263 ($37,263 if married and filing jointly); Have one qualifying child and earn less than $31,030 ($33,030 if married and filing jointly); or Don’t have a qualifying child and earn less than $11,750 ($13,750 if married and filing jointly).
IF YOU TAKE THE STANDARD DEDUCTION: In most cases, base amounts are higher than in 2004. Singles and married taxpayers filing seperately take $5,000; head of household, $7,300; married taxpayers filing jointly, $10,000. The exact amount depends on other factors, like whether you are 65 or older, or blind, or whether another taxpayer can claim you as an exemption.
IF YOU ITEMIZE: Check out irs.gov for details on these tax breaks: IRA’s. The amount you and your spouse, if filing jointly, may deduct as an IRA contribution moves up to $4,000 ($4,500 if you’re 50 or older), if you meet income requirements. Business mileage. The rate increased from 40.5 cents earlier in 2005 to 40.5 cents per mile for all miles driven from Sept. 1 to Dec. 31. Hybrid car owners. You can claim the maximum amount allowed for a clean-fuel or electric vehicle.
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