More Money Monday

Well, today is the day.

Credit

Taxes are due today!

I know, it’s April 18^th not the 15^th.

But thanks to some random DC holiday known as Emancipation Day, the due date was pushed off. 

(Something that was cleverly disguised by a lot of preparers.)

I’m no expert, but I know a thing or two about a taxes.

It’s my “schtick.”

There’s not much you can do to change your tax bill for 2010, but here are my top 5 tips for slashing next year’s bill.

5. Open a “Flex” spending account for your child care costs.

If you have daycare costs, you can set aside up to $5000 a year in a flex spending account.  It reduces your taxable income dollar for dollar.  These days, $5000 is a drop in the bucket when it comes to daycare costs.  If you do the math, it’s waaaay better than getting the child care credit.  Check with your employer to see if they offer one and the requirements for it.

4. Give By Check!

We all know my love/hate relationship with tithing.  But it does pay off at tax time. The key is to give by check!!!  Having documentation is so important!  Banks don’t always return checks but most let you print (or save) a copy on line for 60-90 days.  Do it faithfully for all your donations and expenses.  At the end of the year, double check your giving statement from organizations against your records.   You’ll probably be surprised how much you gave.

3. SAVE!!!

Yes!  Save – as in for retirement, for college…  Those with lower incomes get deductions for saving!  (Note: Saving for your new bass boat does not count!)

2. Seek professional help.

No – not your therapist.  (Although I wish some people would strongly consider it.)  If you’re confused or not sure what to do, seek some help.  It’s sooo much better to pay a little to ensure a correct return, than to pay a lot later.   (And that “a lot” will have penalties and interest!)

1.   Open a Health Savings Account

This is my number 1 recommendation for almost everyone.  Open a medical savings account.  The rules on it have recently changed, but you can still set aside up to $5000 a year for co-pays, prescriptions, glasses/contacts, dentists, etc…  The list goes on and on.  Most of us with families, and those with other health issues such as diabetes, can spend thousands on medications and doctor visits.  Whether you can itemize, have kids, etc. This one tip can benefit everyone.