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Last-Minute Tips For Trimming Your 2011 Taxes

Time is short, but it may not be too late to trim your 2011 tax bill. Here are some last-minute moves and deductions you shouldn’t overlook.

• Maximize your 2011 IRA contribution. You have until April 17 to make deductible 2011 contributions. The maximum contribution is $5,000 for 2011 ($6,000 if you were 50 or older last year).

• If you changed jobs in 2011, make sure you didn’t have excess social security taxes withheld. Claim credit for the excess on your Form 1040 if you paid over $4,486.

• Look into itemizing deductions if you usually take the standard deduction. Search for allowable deductions that you might have overlooked, such as the reinstated deduction for state and local sales taxes in lieu of deducting state and local income taxes.

• Medical deductions are allowable to the extent they exceed 7.5% of adjusted gross income (AGI). Don’t forget items such as eyeglasses and hearing aids. You can deduct mileage for medical appointments, plus parking and tolls.

• Don’t overlook tax preparation fees, safe deposit costs, and certain investment advice. They all qualify as miscellaneous deductions, subject to a 2% of AGI limit.

• Up to $2,500 of student loan interest is deductible whether you itemize or not.

• The deduction of up to $4,000 for qualified tuition and school expenses is available for 2011. Qualifying amounts for you, your spouse, and dependents may be deductible. Income limits apply.

• If you’re a teacher or teacher’s aide, you can deduct up to $250 for classroom supplies that you purchased with your own money.

• The tax law is full of deduction restrictions and income limits. If that left you unable to take full advantage of certain losses, deductions, and credits in a prior year, check to see if you have some usable “carryforwards.” The unused portion of prior-year items can often be carried forward to your current year to reduce your tax liability.

Call our office for details or tax filing assistance.

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