"The standard deduction you take is based on your filing status, but did you know that your age and other factors also make a difference? You can take a higher deduction if you are age 65 or older or if you are blind or both."~Leon LaBrecque, LJPR
Troy, MI (PRWEB) February 28, 2013
“The tax filing deadline is looming and many people are rushing to finish their returns. If you’re one of them, are you certain that you’ve taken all the deductions and used all the credits to which you’re entitled? We have just a few of the steps that many taxpayers miss,” says Leon LaBrecque, JD, CPA, CFP, CFA, Chief Strategist and founder of LJPR, a firm managing over $490 million* in assets.
Choosing the Correct Standard Deduction
“The standard deduction you take is based on your filing status, but did you know that your age and other factors also make a difference? You can take a higher deduction if you are age 65 or older or if you are blind or both. You can find out more about this higher deduction on the Internal Revenue Service (IRS) website here,” says LaBrecque.
Consider State Income Tax vs. State Sales Tax Deduction
“Many people forget that taxpayers who itemize deductions are allowed to deduct the state and local sales taxes they paid during the year. Be aware that you must choose between a deduction for state and local sales taxes and one for state and local income taxes. If your state has no income taxes, then you’ll clearly want to look into deducting your state and local sales taxes. Even if your state has an income tax, it may be worth your while to add up all your 2011 receipts to see if the sales taxes you paid are higher than your state and local income taxes for the year. (If you don’t have receipts, you can also consider using the IRS’s state tax deduction calculator),” says LaBrecque. “Remember that you may have run up high state or local sales taxes in 2011 if you made a significant purchase, such as a car, boat or airplane or other big ticket items. Also, if you owed state or local income taxes when you filed your return last year, don’t forget to include those taxes in any amount you deduct this year.”
Don’t Miss Out on Student Loan Interest Deductions
“The rules for the deduction of student loan interest can be tricky. Many college students or young workers may not deduct the interest paid on their student loans if their parents paid that interest and claimed an exemption for them on their tax return,” says LaBrecque. “However, taxpayers who are not claimed as dependents on their parents’ returns can claim up to $2,500 in deductions for student loan interest, even if someone else is paying off the loan or interest, as long as the loan is in their name. Remember to check the limitations on eligibility for the student interest deduction based on your modified adjusted gross income.”
Take Tax Credits into Account
“Deductions lower your taxable income, but tax credits are even more valuable because they directly reduce the amount of tax you pay. That’s why you should not miss some of the many credits available. The Earned Income Tax Credit lowers the tax bite for low- and moderate-income working families,” says LaBrecque. “The child tax credit applies for most families with children under 17 and the child and dependent care credit should come in handy for families who pay for child care. The American Opportunity and Lifetime Learning Credits can help families cover education costs, while the saver’s credit makes it easier for lower-income families to put away money for retirement. There are also credits available for homeowners who have made energy-saving improvements during the last year.”
About Leon LaBrecque
Leon C. LaBrecque is the managing partner and founder of LJPR, LLC, an independent wealth management firm located in Troy, Michigan that manages $490 million in assets (as of 12/31/2012). Leon is a practicing attorney, CPA, CFP® and CFA that has specialized in servicing individuals, families, and small businesses in the areas of financial, estate, and tax planning for over 32 years. LaBrecque’s extensive career includes previous work at Arthur Andersen, Plante Moran, and as the Department Chair of Finance and Economics at Walsh College where he created the Master of Science in Finance program. He has also authored several proprietary retirement planning programs for CalPERS, the states of Montana, and Washington, and corporate clients including General Motors, Ford Motor Company, Lucent, and AT&T, among others. LaBrecque’s specialties include investment management for foundations and non-profit organizations, financial planning for automotive employees and retirees, and retirement planning for police officers and firefighters.
*As of 12/31/2012