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Tax Tip of the Week
For the week of
December 15, 2003

There's still time for some last-minute deductions

You still have time to cut your 2003 tax bill by squeezing in a few more itemized deductions. But first check that it still pays to itemize. The standard deduction for married filers increased to $9,500 this year. And remember that itemized deductions begin to phase out for high-income taxpayers. If you plan to itemize, here are some suggestions.

Charitable contributions. The quickest way to boost your deductions is to write an extra check to your favorite charity. Or clear out your closets and donate used clothing and other items to a thrift store. If you've made a multi-year pledge to a charity, consider accelerating next year's payment into this year. For extra tax savings, donate appreciated stock instead of cash. That way, you'll avoid paying capital gains tax on your gain while you get a deduction for the stock's value. Deduct your mileage for charitable activities at 14 cents a mile.

Medical and dental expenses. These expenses are deductible to the extent they exceed 7.5% of your adjusted gross income. To boost your total, consider buying another set of eyeglasses or contact lenses before year-end. They're both deductible. And don't forget parking, tolls, and mileage at 12 cents a mile for doctor and dentist visits. Costs of medical insurance and some long-term care insurance may also be deductible.

Miscellaneous deductions. These expenses can be deducted to the extent they exceed 2% of your adjusted gross income. Consider visiting your accountant for a year-end and early-2004 tax planning session. Some estate planning fees and safe deposit rental costs also count. And don't overlook unreimbursed employee expenses, such as dues to unions or professional organizations, work clothes and tools, and some job search expenses.

For tax-cutting strategies that fit your particular situation, give us a call today. Remember, it will soon be too late to cut your 2003 tax bill.

Click here to view previous tax tips.

"Tax Tips" are published weekly to provide useful tax information. Return to this site every week for helpful tax-cutting suggestions, tax reminders, and current tax information.

The information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.

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