A D S Tax Services, LLC

• Tax Tips for Individuals

Get your refund money now. Instead of giving the IRS and State Governments, adjust your withholding and get your money when you need it.

Example: You get a $3,000 refund every year. Change your withholding so that you get the money as you earn and reduce your refund to $500. This will give you an extra $48 per week to live on.

To Change Your Federal Withholding, CLICK HERE.

To Change Your NYS Withholding, CLICK HERE.

Consider purchasing a house. 
Don’t waste money on rent. By paying a mortgage the interest is deductible, along with any property taxes you pay. You could save yourself hundreds or even thousands every year. Watch for government incentives.

Throw money into a pension. 
Save for your retirement and give yourself a tax break at the same time. The contribution limits are the following.

*Based on 2009 and 2010 figures

Go back to school. 
If you’re paying for undergrad or post grad courses you may qualify for the lifetime learning credit. This credit is worth 20% of your qualified tuition bill, up to $2,000.

Also, as long as you are in your first four years of post secondary education, you may qualify for the new American Opportunity Tax Credit. You get a dollar for dollar credit on the first $2,000 in tuition expenses; followed by an additional 25% on the next $2,000 in tuition. The credit will not exceed $2,500. This credit is partially refundable, and it could give you an additional $1,000 in your refund.

To learn more, CLICK HERE.

Buy a new car. 
For the first time, you can write off the sales tax of a new vehicle without being an itemizing taxpayer.

Also, there are additional breaks for those who purchase Hybrid Vehicles depending on the make and model.  By going green, you could save up to $3,000.

For More Information On The Hybrid Vehicle Tax Credit, CLICK HERE.

Save money on health care. 
Flex spending plans are a wonderful break to taxpayers. These plans allow you to defer taxable income from your paycheck so that you can pay for your medical expenses. You can even use them to purchase over the counter medicine. The IRS won’t even allow you to deduct that on your return, but they do qualify in these health care plans.

Keep track of your job hunting expenses. 
If you are looking for a job in the same field, you can deduct your expenses.  These include mileage, airfare, hotel stays, parking fees, tolls, job website subscriptions, and many more.  All these expenses can add up and pay off big.

Don’t Steal From Your Pension. 
Many taxpayers are using their pension money to pay off debt. This will increase your tax and hit you with a 10% penalty. If you’re a homeowner, consider taking out a home equity loan. You could save money on a better interest rate, and the interest is deductible on your tax return.

Your child goes to school, but you get the credit. 
Many think that because their son or daughter is going away to school, that they cannot be claimed as dependents and they lose their child’s education credits. The truth is that leaving home for education is considered a “Leave Of Absence”, which allows the parent to claim the child and their education credits. Just make sure you set your child doesn’t claim themselves. A mistake could provoke an IRS audit and hold up refunds.

If you’re divorced it’s your turn to claim the kids, you need to be ready. 
Divorce decrees no longer hold any value in the eyes of the IRS.  From this point forward you must have a signed form 8332 from the custodial parent giving you consent to claim the child.

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