Are you ready for tax day?
First, some good news: This year’s deadlines are unusually late. Because April 15 coincided with a District of Columbia holiday, 2010 tax payments are due Monday, April 18. The deadline for those with six-month filing extensions is Oct. 17.
Now for some bad news: Audits on wealthier taxpayers are likely to rise, say tax experts, while refund amounts are merely holding steady. As of mid-March, just over half of all 140 million-plus individual returns had been filed, slightly behind the total for last year, and the average refund continued to be about $3,000.
If you are racing to meet the April 18 deadline, here are some last-minute tips gathered from a broad array of tax preparers. We have identified eight deductions that many people overlook, eight audit triggers, six common mistakes, five reminders for investors and three ways to cut your tax bill right now. Plus, we offer a heads-up on the perils of offshore accounts.
1. State-tax refunds for AMT taxpayers. Taxpayers often forget that state tax refunds aren’t taxable to those who owe alternative minimum tax, or AMT, for the same tax year, as long as the amount of the refund is less than the amount of state income tax disallowed under AMT.
2. Charitable donations, Part I. Donors may not deduct labor or time, but they may deduct expenses such as mileage or uniforms. Board members or chosen representatives also may deduct unreimbursed expenses for attending a conference or meeting. For details, see IRS publication 526.
3. Charitable donations, Part II. Employees who give to charities via payroll deductions at work frequently forget to include them on their personal return. “The number is not on the W-2 and there’s no letter,” says Melissa Labant, an expert with the American Institute of CPAs.
More tax tips: http://online.wsj.com/article/SB10001424052748703461504576230743028469786.html?mod=yahoo_free
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