Tax Tips for Savvy Aunties
Written By Savvy Auntie Staff Writers
By Ilana Arazie, CPA Paul Herman of Herman & Company CPA’s, P.C.
While even the idea of taxes can make most people cringe, the old saying goes, “Two things in life are inevitable. Death and taxes.” So roll up your sleeves, ladies, and check out these handy tax tips every Savvy Auntie should know.
1. Surprise Them With Love & Money
Whether it’s a birthday celebration or help with the bills, your nieces and nephews will always appreciate gifts from their favorite Auntie. Gifts can be given to your nieces and nephews tax-free just as long as it’s no more than $14,000 a year. Just remember to save your receipts and document the gift; you’ll need to file the exact amount on your tax return.
If lending a hand with education sounds like a better plan, you can help out with your nieces’ and nephews’ college education by contributing to their state’s 529 college savings plan at up to $10,000 tax-free.
We can bet many of your nieces and nephews are nowhere near close to even begin thinking about retirement, but it’s never too early to start planning! Contributing to a Roth IRA at up to $5,000 a year on behalf of your loved ones is a wonderful way to help them secure their future. They’ll certainly be glad you did.
2. Single Aunties
Single? Bring on the tax benefits! Certain tax deductions you may qualify for include your standard deduction of $6,100, business/employment-related expenses (always save your receipts!), medical care and health insurance, charitable donations, mortgage deductions and property deductions of up to $250,000. Hello, fat wallet!
3. Got Another Half?
Married couples can either file a separate or joint tax return, depending on their financial situations. Joint filing is usually a good idea if you’re both working and one of you makes more than the other, which might just put you into a lower tax bracket. Best of all, joint filing often means you qualify for more tax benefits! These include a standard deduction of $12,200, mortgage deductions and property deductions of up to $500,000.
Being a tax-savvy aunt and knowing your stuff can mean all the difference in the world when it comes to boosting your bank account.
Paul Herman is a CPA based in Westchester County NY and owner of Herman & Company CPA’s, P.C. Visit his site for more info and to get your free “crash course” consultation here: http://www.hermancpa.com.
Photo: adamr
Published: September 17, 2013