Tip of the Month for February 2001

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Tip Toe Through Your Taxes

The IRS joins the electronic age. You can now file your return electronically. Instead of the good old, traditional signature, a personal identification number (PIN) will be used instead. There are, as always, rules to follow, but these aren’t too bad. Check it out at the IRS e-file page. The IRS wishes you many happy returns!

Don’t Gamble Those Winnings With the IRS

If you won a lot of money in a lottery or at a casino, you are expected to report them and pay taxes on them as well. The lottery and the casinos may also have filed a report of your winning s with the IRS. You lost money gambling? Well, the losses, by themselves, are not taxable, BUT they can be used to offset your winnings, thereby reducing your tax liability. In order to do this, you have to keep a thorough record of the date, name and address of location, type of gambling, and the names of the people accompanying you and whether you won or lost. It’s a lot of work, but better than to gamble with the IRS.

Looking For Buried Treasure? Start With Last Year’s Tax Return

If you ran out of things to deduct, check last year’s return. You may find some expenses that now, you can fully deduct. Some of the areas to look are mortgage refinancing since lender fees are usually spread over the life of the loan.

Another one might be capital losses, multi-year subscriptions to deductible publications, home-office expenses, investment interest, business depreciation, large charitable contributions, net operating losses and alternative minimum tax credits. Was doing this year’s return already a daunting task? Well, it could save you a bundle.


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