By Jerry Love, Louisiana Baptist Foundation
ALEXANDRIA – Once again we are moving into that exciting season of the year. No, not baseball season… yet. It’s Tax Season!
Like most Americans, you want to pay your “fair” share (whatever that may mean) but definitely don’t want to pay more tax than necessary. Here are a few reminders about deductions that sometime get overlooked.
As Yogi Berra might have put it, here’s something so you don’t forget to remember what you forgot.
As always make sure you check with the coaching staff (your personal advisors) if you have questions regarding the application of these deductions to your gameplan.
Game extended for State
Sales Tax Deduction in 2014
Late in the game of 2014, Congress took the state sales tax deduction into extra innings. Currently you can choose either to deduct the income tax you paid in the previous year or the sales tax paid, whichever is greater. This is important to those who may have bought a “big-ticket” item such as a car or a boat last year. The tax paid on that one item may push your sales tax deduction higher than the income tax deduction that most people take. The IRS web site has a calculator (http://www.irs.gov/Individuals/Sales-Tax-Deduction-Calculator) to assist you with this determination. Also most tax preparation software will assist with this decision as well.
Nothing Wrong with
Playing Small Ball
Most of us are good at keeping up with our extra base hits (larger contributions to our church or other charitable organizations).
However many times we help churches and ministries in other ways that are also deductible. Let’s call it getting a “timely single” or “advancing the runner.”
For example if you purchased printing or mailing supplies to promote your church’s youth fund raiser, this type of expense is deductible for itemizers.
Also if you used your vehicle to deliver meals to local “clubhouse-bound” on behalf of your ministry’s soup kitchen, don’t forget to deduct 14 cents per mile.
These deductions can add up and cut your final tax bill. Careful! Don’t swing at that high fast ball and strike out. The IRS is pretty much a stickler on documenting these claims.
Keep good “stats” and check out IRS Publications 526 and 561 at IRS.gov to know the ground rules on charitable contributions.
Relocating to a New Team
Quite a number of folks were free agents and in the hunt for a new team (job) this past year.
The expenses associated with looking for a new job may be deductible. Two things are important to remember: 1) you must be looking for a job in the same line of work as your current or most recent job; and 2) only the expenses that exceed the threshold of 2% of your adjusted gross income are deductible.
Eligible expenses include:
Transportation to interviews such as cab fare, parking or mileage when driving your personal vehicle.
Printing costs for resumes and business cards, postage, etc.
If you have an overnight stay away from home, food and lodging expenses
Fees paid to employment agencies
Sorry all you college grads, these deducts don’t apply to rookies (first-time job seekers). But don’t despair. You can deduct costs related directly to relocation to that AA or AAA team (your first job) as long as you are moving more than 50 miles from home.
And this deduction is available even for non-itemizers. Check out IRS Publication 521 for details.
Here are some other deductions and credits in the Rule Book to check out with your batting coach (tax advisor):
The Guard and Reserve – Travel and some expenses can be deducted for meetings, drill and training more than 100 miles from home for members of the National Guard and military reserves.
Child Care Credit – A dollar for dollar reduction in your tax bill is available for a percentage of the out of pocket child care expense that you pay while you are working.
American Opportunity Credit and the Lifetime Learning Credit – These two credits will lower your tax bill by a percentage of the cost of higher education. Each applies to different circumstances; you may be able to choose one of the two credits. Once again, credits reduce your tax bill dollar for dollar. Deductions are good but credits are great!
Baggage Fees for Business Travelers – If you are self-employed or pay expenses out-of-pocket for business related flying, don’t forget to include baggage fees in your total deductible amount.
Hope this is helpful to a few fans.
So knock those pesky tax returns out of the park, then sit back and enjoy the greatest of seasons in America – Baseball Season! (Who was that who said NASCAR?)
You can find more tax tips at Kiplinger.com.
The Louisiana Baptist Foundation exists to assist individuals with gifts to Baptist churches, institutions and ministries that are affiliated with Louisiana Baptist Convention or the Southern Baptist Convention.
For assistance with gifts and estate stewardship, no matter what season of year, call the Louisiana Baptist Foundation at 1-877-523-4636.
You can also learn more about our Foundation by visiting our website at www.LBFinfo.org.