Time is short, but it’s not too late to trim your 2004 tax bill.
Here are some last-minute moves to consider and deductions you
don’t want to overlook.
Time is short, but it’s not too late to trim your 2004 tax bill. Here are some last-minute moves to consider and deductions you don’t want to overlook.
Maximize your 2004 IRA contribution. You have until April 15 to make deductible 2004 contributions. The maximum contribution is $3,000 for 2004 ($3,500 if you were 50 or older last year).
If you changed jobs in 2004, make sure you didn’t have excess social security taxes withheld. Claim credit for the excess on your Form 1040 if you paid over $5,450.
Look into itemizing deductions if you usually take the standard deduction. Search for allowable deductions that you might have overlooked, such as the new deduction for state and local sales taxes in lieu of deducting state and local income taxes.
Medical deductions are allowable to the extent they exceed 7.5 percent of adjusted gross income (AGI). Don’t forget items such as eyeglasses and hearing aids. You can deduct mileage and parking for medical appointments at 14 cents a mile. Parking and tolls are also deductible.
Deduct miles driven for charitable work at 14 cents a mile unless you’re reimbursed for your expenses. Parking and tolls are also deductible.
Don’t overlook tax preparation fees, safe deposit costs, and certain investment advice. They all qualify as miscellaneous deductions, subject to a 2 percent of AGI limit.
Student loan interest is deductible whether you itemize or not.
The deduction for qualified tuition and school expenses increased to $4,000 for 2004. Qualifying amounts for you, your spouse, and dependents may be deductible. Higher-income taxpayers might qualify for a deduction of up to $2,000 for these education expenses.
