More Tax Tips, This time from the IRS
In our last blog post, we provided our readers with some advice for reducing their federal income tax bills before the end of the year. We have some more tips for you today. Today’s tips, provided by the IRS, may apply more to the general public, instead of mostly high-income taxpayers.
First, now is the time many people make donations to their favorite charities. The IRS warns that you can only claim deductions on donations to qualified charities. The IRS’ website includes a page where you can confirm whether the organization you gave to is “qualified.” A link to that page can be found in the article linked to here.
Regardless of the above, you may deduct any donation you made to a religious institution like a synagogue, mosque or church, or a government agency. Make sure to have a bank record or written statement from the charity.
Business miles, or travel you made for business purposes, can also be deducted. The IRS’ rate for 2014 is 56 cents a mile. Mileage for medical or moving purposes can also be deducted at 23.5 cents per mile. Finally, you may deduct 14 cents per mile you travelled to provide services for charitable organizations.
For low-income and moderate-income households, the saver’s credit can help them plan for retirement. People whose income qualifies and who contribute to an IRA, 401(k) or similar retirement account through their work can claim a tax credit. The credit is up to $2,000 for married couples.
Though these and other deductions are available, accidentally claiming more deductions than you are entitled to can lead to an IRS audit. If that happens, having a tax attorney represent you can be invaluable.