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The Season for Taxes
Yes
Here are some pointers to consider as you ponder the April 15 deadline.
If you’re married, consider filing separately. Usually it’s best to file jointly. But if one of you is making significantly more than the other and has lots of deductions, it may pay if you file separately.
Think retirement. If you haven’t contributed the maximum amount to your IRA, you and your employer can still add to it up until April 15.
Claim your home office. However, if you sell your home, you’re accountable for a capital-gains tax on the percentage of the home you’ve claimed as your office.
Don’t pay taxes twice on your mutual funds. When you sell your shares, add past dividends and capital gains that you’ve already paid taxes on to your original investment. That determines the taxable cost basis.
Clear the tax paper clutter.In the effort to have a well-documented return, many of us tend to keep papers that we should just pitch. Once you’ve done this year’s filing, heed these tips on weeding out the documents that you should keep — and those that you shouldn’t — for next year:
- Get the IRS’s Recordkeeping for Individuals booklet. It’s packed with information to help with tax-related records. Find it on the IRS Web site.
- Keep your returns. They provide you with a record of your finances. Also, they might come in handy when it comes time to retire and you need to back up your Social Security benefits.
- Keep the last paycheck stub of the year. The stubs usually provide a running summary of pay and deductions, so the last one of the year is the only one you’ll ever need.
- Keep receipts for major purchases and renovation. They’re useful in case you have to file any insurance claims or deal with tax issues.
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