Free Tax Tip #2: Itemized Deductions

February 8, 2012 10:00 PM

(credit: CBS)

bucks copy Free Tax Tip #2: Itemized Deductions

(credit: CBS)

by Barry Steiner, CPA (Former IRS agent)

Managing a tax burden has never been more difficult, whether you’re managing your individual tax rates, the rates on your investments, the taxes on your privately held or pass-through business, or the income of executives and shareholders at your company. Lawmakers have been aggressively using the tax code to try to get the economy back on track, and there are now more ways than ever to reduce your tax liability – however, all of them take planning.

2. Group Together Your Itemized Deductions

Many itemized expenses can be deducted only if they exceed a certain percentage of your adjusted gross income (AGI). By combining itemized deductible expenses into one year you can help exceed these AGI floors. Think about scheduling your non-urgent medical procedures all in one year to clear the 7.5 percent AGI floor for miscellaneous expenses, combine pass-through business’s professional fees such as tax planning and legal advice, in addition to any unreimbursed business expenses.

Your Weekly Tax Jokes

“Because of a holiday, the deadline for taxes is April 18, so you have three extra days to dig through restaurant dumpsters for receipts.” – Jimmy Kimmel

“The government is really asking a lot of us this month — first we’re supposed to count how many people live in our home — then we’re supposed to count how much money we owe them. I actually got confused and accidentally sent a check to the census and a member of my household to the IRS. Sorry Grandma.” – Jimmy Kimmel

“Nobody likes taxes, but they’ve been around forever. Taxes date back all the way back to the year one, when baby Jesus was visited by two wise men and an IRS agent, who demanded half the family’s frankincense” -Jimmy Kimmel

“The IRS says it’s been getting death threats since the health care bill passed because the IRS is going to be the ones in charge of implementing it. They say the threats people are making to the IRS are so bad, that they are actually hindering the IRS’s ability to threaten people.” – Jay Leno

Click here to see previous Tax Tips from Barry R. Steiner. Check back next Wednesday night, 10 PM Central, for another free tax tip – one tip for each week of the tax season until April 17th.

Barry R. Steiner is a Chicago-based CPA and former IRS Agent. He’s the author of the best-selling income tax guide “Pay Less Tax Legally” and was a regularly featured guest on ABC-TV’s “Good Morning America”. Barry has maintained his own tax practice for the past 40 years, and most recently has authored two e-books: “Infernal Residue” and “Kiss My IRS”. More info at KissMyIRS.com »

Watch & Listen LIVE