I owe the IRS about 900 dollars. I am an account manager (inside Sales). I have always just went to H&R Block and had my taxes done. I need to know what I can itemize. Is there any secrets to help bring my balance down.
2007-01-04 06:24:15 · 5 answers · asked by Justin B 2 in Business & Finance ➔ Taxes ➔ United States
Do you owe $900 from this year's return, or is it from a previous year's return?
To cut your tax bill for this year check these thing:
- Do you own a house? You get to write off mortgage interest and real estate taxes
- You can write off any other property taxes that your state charges
- You can write off donations you make to most charities
There are too many others to list, however, it is too late to take advantage of them as teh new year has started. You can make a contribution to an IRA account. If you make the contribution by April 16 of this year, then you are allowed to write it off of last year's taxes (even if you don't itemize deductions). You may be able to put $5000 into an IRA (not a Roth IRA) and that reduces your taxable income by $5000. If your income is low enough (under $25,000 filing single/seperate, $37,500 head of household, or $50,000 married filing joint), then you can get an additional tax credit for making the contributions (you can contribute to either an IRA or a Roth). But this only comes into effect if you did not contribute to a retirement account already. And you could not have been a student in 2006 to claime this credit.
2007-01-04 06:50:15 · answer #1 · answered by j-man 4 · 0⤊ 0⤋
That "IRA" trick that J-man mentioned seems to be a well-kept secret. I've suggested it to many people and they just don't get the fact that they get an immediate return on the investment in the form of a tax refund, and it can be especially lucrative for married (low income) couples. The first year I did it, I could only afford $1000 extra, but it gave me an immediate return of about $540 higher refund! (I was only supposed to get 50%, but the contribution increased my earned income credit at the same time.)
That means I put $1000 into my account but less than half of it was from my own pocket.
Other than that, go get a schedual A to see if you have enough to itemize. The biggest deductions on the form come from paying interest on a home mortgage and paying property taxes. If you don't have a mortgage, it might be a waste of time to try to add up the rest.
If your $900 tax bill is based on owning a business, that's a different story. Let us know, there might be some business deductions that you left out.
(By the way, the deadline for making contributions to an IRA is April 15, not Dec 31.)
2007-01-04 15:16:53 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Just pay the $900. Or hire a good accountant for about $900 to reduce the balance with those accounting tricks they know. No matter how you slice it the government owns you so just get used to. All the super rich put their money in charitable trusts and pay no taxes. Only working folks pay “income tax” the rich can afford to "avoid" this problem. Welcome to the land of the free!
2007-01-04 14:29:42 · answer #3 · answered by mikearion 4 · 0⤊ 0⤋
No secrets. Just look at a Form 1040 for income adjustments and Schedule A for itemized deductions at www.irs.gov.
2007-01-04 14:28:14 · answer #4 · answered by spicertax 5 · 0⤊ 0⤋
You can write of the cost of having your taxes done. For example if you paid $500 for your taxes to be done in 2005, when you file the 2006 taxes you can deduct that $500. Wish I could be more helpful. GL
2007-01-04 14:29:27 · answer #5 · answered by grand96prix 3 · 0⤊ 1⤋