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April 8, 2009
Dear Clients and Colleagues,
Taxes are due in a week, so let’s take a quick look at more ideas to
save a few dollars.
If you have a child in college who also is working and paid her own
tuition, look at not claiming her on your own taxes if your income
is too high to qualify for the Hope or Lifetime Learning Credit. By
not claiming your child as a dependent, he or she may qualify for an
education credit that you might earn too much to claim, saving more
taxes than it costs you. Figure your child’s taxes as both a
dependent and not, and your own taxes both claiming your child and
not claiming your child as a dependent, to calculate which gives you
the best savings. If that sounds like too much, give me a call.
Did you contribute the maximum amount to your 401K and/or IRA? If
not, you have just a week to send money to your IRA for 2008. As for
the 401K, make changes now to maximize your contributions for 2009.
Each additional $100 you contribute reduces your taxable income next
year by $100. That could save you $25 in federal taxes and $9 in
California taxes, depending on your tax bracket.
If you itemize deductions and your medical expenses are high enough
to approach 7.5% of your adjusted gross income, do not forget to
include all your medical expenses. This includes insurance premiums,
co-payments, prescription medication, the optometrist and dentist,
and even mileage and parking at the doctor’s.
Also you may be able to deduct unreimbursed employee expenses (to
the extent they exceed 2% of your adjusted gross income), such as
job travel, professional or union dues and job education. Finally,
did you remember investment expenses like safe deposit boxes and
investment newsletters? Finally, the fees you pay to your CPA may be
deductible.
But the best advice is to start planning for next year right now.
There are lots of things you can do over the next eight months that
could save you “mucho dinero” on April 15, 2010. In coming
newsletters I will review many of them. Or, better yet, call me to
work out a plan.
Believe It or Not. According to the IRS (Wall Street Journal,
January 7, 2009) the U.S. Tax Code is so complex that we spend, drum
roll please, $193 billion per year figuring out how much we owe.
That is 14% of all income taxes collected. Tax code changes over the
last eight years have averaged one per day—with over 500 in 2008
alone! This is known as The CPA Full-Employment Act.
If you are unemployed or just looking for a job, my Financial
Assistant, Evan Press, has taught both resume writing and
interviewing classes. He would be glad to meet with you or review
your resume. No charge. Please contact him at 818.887.9401 or by
Email at
evan.press@HornsteinFinancial.com
In fact, if you have any questions about your tax or financial
situation, need advice before you set up an IRA or 529 College
Savings Plan, make an investment or a big purchase, or want help
making sure that you can meet your financial goals, please contact
us. Also, if you know someone who could benefit from our services,
for example, your son or daughter who should start saving for
retirement, please contact us. We would love an introduction.
We are a full-service financial firm, with experts in estate
planning, taxes and financial strategy, and offer a free initial
consultation.
Thank you,
Steve Hornstein
Steve H. Hornstein, CPA, Esq., LL.M., CFP™
Hornstein Financial
20335 Ventura Blvd., Suite 203
Woodland Hills, CA 91364
Office: (818) 887-9401
Fax: (818) 887-7173
Toll-free: (888) 280-8100
www.hornsteinfinancial.com
Securities are offered through LPL Financial, Member
FINRA/SIPC
The opinions voiced in this material are for general information
only and are not intended to provide specific advice or
recommendations for any individual. To determine which investments
may be appropriate for you, consult myself or your financial advisor
prior to investing. All performance referenced is historical and is
no guarantee of future results. All indices are unmanaged and cannot
be invested into directly.
This document is for information purposes only and is not intended
to be an offer or solicitation. The past performance of securities
or other investments does not necessarily indicate or predict future
performance.
The information in this document is not intended to provide
individual tax advice. You should consult either your tax advisor or
me for specific guidance. |
