General Finance » Taxes

Pay Property Taxes

Nagel — Mon, 18 Jun 2007 11:56:39 +0000

Who likes to pay property taxes?

Answer: Nobody!

Where I live property taxes are typically higher than many other parts of the country. Unfortunately when my wife and I received our deal for our mortgage we had to agree to pre-pay our property taxes in the same payment as our mortgage. I was not happy about it, but we saved 0.75% on our interest rate because of the real estate market slow down. So we agreed, and who would not.

I recently found out after 12 months of mortgage payments we will be able to pay each six months instead of monthly. This way we can save 6 months of property tax money and collect interest by putting it in a savings account. Also, if we have large expenses we can pay them off, while still continuing to save up to pay twice yearly.

Home Selling Capital Gains

Nagel — Fri, 15 Jun 2007 13:38:16 +0000

The current housing market is awful, and might not get better any time soon. If you are selling your home you are probably concerned about what price you will get for your home, and you are racking your brain in order secure a good price.

I am not trying to sell my home, but one day I probably will be. In order to save as much on the capital gains when my home is sold, we save all records of costs for home improvements. By doing this we can deduct all the money we put into our home off the capital gain amount in order to keep more of the money we will receive once the home is sold and the mortgage is paid off.

What ideas do you have?

Taxes: County

Nagel — Sat, 12 May 2007 16:45:49 +0000

The other day I was examining my property tax bill, my first one. It is interesting to see how expensive it is, and where the tax money goes.

Taxes: County

I am paying for a county airport that no one uses.
I am paying for county employees pensions funds. That is fine, but because of the solvency of the county and state, those employees may never see their pensions.

County taxes are fine, but i think they will be wasted. Local taxes go mostly to schools and that is fine, but a closer examination of county taxes is necessary.
Township and Village taxes are reasonable, but it would be nice to see them re-examined. Like everyone, I would like to pay less taxes, but I am not holding my breath.

Tax Due Date too Early? File an Extension

Nagel — Tue, 13 Mar 2007 10:31:05 +0000

The last day to file income tax returns for 2006 is Tuesday, April 17, 2007. So if you cannot file your tax forms by then you better consider a 2006 tax extension.

The clock is ticking quickly and tax day will be upon us soon. Currently, you may find yourself short of time to file a complete and accurate return. If this is you, simply apply for an extension by the due date of your return, April 16, 2007. Now this is important: Go to irs.gov and print out Form 4868 and send this extension request to the Internal Revenue Service office with which you file your return. You get an automatic 6-month extension if you file the correct paperwork on time, and if you give a ballpark estimate of what you probably will owe–you will owe interest on any tax not paid by April 16, 2007. Paying tax by credit card is an option–SEE FORM 4868 for all the details. If the tax paid with Form 4868, plus withholdings and estimated tax payments for 2006, is less than 90% of the total amount due, you will be subject to a late-payment penalty (usually one-half of 1% of the unpaid tax per month)—unless you can show reasonable cause. Remember: Do not mess with the IRS! They have the government behind them and that is not something you want to get yourself involved in.

If you know October 15, 2007 still will not be enough time to come up with the necessary tax payment you need Form 9465 to request an installment arrangement. Now this will not be easy nor pretty.

If you owe under $10,000 you have a chance.

Prove you you will not have the means to pay the tax
Prove that the last 5 years you filed and paid your taxes

Plus not installment agreements in that time

If married, you both will need to meet this criteria
Pay tax off within 3 years
Late payment penalty interest charge of 0.25% per month will apply

Federal Alternative Minimum Tax: AMT

Nagel — Mon, 05 Mar 2007 11:36:50 +0000

It’s time to worry about the the Federal Alternative Minimum Tax again as tax-season is upon us.

Leave it to Congress to create a tax to make sure that the very rich pay some taxes and then not have it indexed to inflation. Now millions on non-millionaires are getting trapped by this AMT. Not only that, you the tax-payer, are supposed to figure out if you are “qualified” for the federal alternative minimum tax and follow all the convoluted rules that apply–GET AN ACCOUNTANT! The Bush Administration’s tax cuts back in the first term were supposed to provide tax relief for all, but it has triggered the AMT to capture even more Americans. Once you have been caught into the web of the federal alternative minimum tax you are there forever; “qualifying” one year means that you will pay AMT for every following tax year–Yippee! There are members of Congress that want to get rid of the AMT, but it is a huge windfall for the federal government plus they are concerned about Iraq–not the AMT. So do not count on a change soon.

All Financial Matters on the AMT

Personal Finance Education Websites

Nagel — Sun, 04 Mar 2007 13:40:35 +0000

Many people want to learn more on personal finance and investing, but do not know where to start. Websites like this one and other personal finance sites are great tools. I also wanted to let you know of other resources available to get you up-to-speed on a wide variety of financial topics.

I would recommend watching Mad Money for investing. He is one of the few who will go step-by-step to help you invest smarter. This can buttress a general investing education you can get from doing some homework. Obviously, there are loads of investing books so look around and see what others have to say about it.

These are from from the only options available. You can easily go to Kiplinger, Money, Smartmoney, Yahoo! Finance, Google Finance, etc. These are all informative and can hold your hand until you get the hang of certain topics you might not have mastered yet.

These are great personal finance education websites to start. Ask around and get people’s opinions on what sources to use. I would recommend using as many reliable sources as possible. It is not easy, but we all want to do better with our money.

IRS Audits

Nagel — Fri, 09 Feb 2007 13:40:22 +0000

This piece by Christian Zappone, CNNMoney.com staff writer, is an excellent primer as you get ready to do your taxes.

The IRS conducted 1.3 million audits last year, up more than 5 percent from the year before.

And now, President Bush’s recently released budget calls for a step-up in efforts to close the $300 billion “tax gap,” the difference between what is owed in taxes and what is collected.What’s more, there are some new rules on the books that could trip up tax filers.

Any way you look at it, more tax audits may be on the way. Here are five red flags the IRS is likely to watch out for this tax season.

Earning too much money

It’s a problem most people would probably love to have, but high earners should be aware that they’re more likely to end up on the IRS’s radar, according to David Sands of Buchbinder, Tunick and Co.

Sands says once an income tops $100,000, the chances start increasing.

The emphasis on flagging high-net-worth filers makes financial sense from the IRS’s perspective.

“The IRS is under pressure to close the tax gap,” said Bill Stromsem of the American Institute for Certified Public Accountants. “It doesn’t pay to find a $100 error in a filer in the 10 percent category instead of $1,000 from someone in 30 percent tax bracket.”

In 2006 the IRS audited the returns of 17,015 tax filers reporting income of $1 million or more. That’s up 33 percent from the 12,835 audits of million-dollar earners it conducted in fiscal year 2005.

The IRS’s audits of taxpayers with reported incomes above $100,000 rose 18 percent in 2006 from the previous year, to more than 257,000 returns.

The IRS declined to comment on the specifics of audit red flags.

Giving too much to charity

Excessive contributions to charity could trigger an audit, too.

Sands estimates that once contributions exceed 5 percent or 10 percent of income, that may raise questions.

Complicating matters is that this year the rules related to deductions for charitable giving have gotten stricter, with the IRS demanding more documentation. Sands says there is a feeling there has been “some abuse in this area” in recent years.

Taxpayers will have to keep a qualified appraisal of donated clothing and household items that exceed $500.

They must have a receipt or bank record that shows the name of recipients of financial donations. For most taxpayers this change only applies to contributions made after the start of 2007.

Finally, IRA holders older than 70-1/2 years can directly transfer up to $100,000 tax-free to any charity, but the funds must be given directly by the IRA trustee to the charity.

Knowing when the alternative minimum tax applies to you

Taxpayers can be subject to the alternative minimum tax and not know it. Failing to submit an AMT schedule when you are in a high-risk group may grab the IRS’s attention.

Some people aren’t attaching an AMT schedule and are subject to it, according to Sands. Those that fit the AMT profile: High earners in high-tax states.

Sands puts the threshold for a filer entering the AMT category at about $100,000-$120,000.

Stephen Buschel, tax partner at BDO Seidman, calls the AMT “an insidious tax because you never know when it’s going to hit.”

The AMT aims to collect taxes that are lost when filers use so many deductions they pay no taxes at all. This is because while the tax was invented in 1969 to prevent wealthy filers from avoiding taxes through extensive deductions, it has never been adjusted for inflation, and so it captures ever more filers lower down on the scale.

When a return is filed, the IRS will do the calculation to see if it qualifies, said Buschel.

Taking too many credits

Tax credits are another area of concern, especially for people at the lower end of the income scale. The biggest mistakes are made with earned income credits, according to Sands, who cites a general confusion about credits for education, seniors and earned income.

“I can understand why it’s very confusing,” said Sands, pointing out that people often take credits they’re not entitled to.

He suggests that lower-income filers use the IRS’s walk-in services. A Volunteer Income Tax Assistance Program has been set up to help low- to moderate-income filers who cannot prepare their own returns.

There is also the Tax Counseling for the Elderly Program, which offers help to filers 60 years of age and older.

Careless errors

Things as simple as a sloppy return can derail an otherwise routine tax return. Matters as small as incorrect Social Security numbers, math errors or simple misspellings can bring a tax return to the attention of the IRS.

“There’s no excuse for that. Just show a little care and get your material together,” Stromsem remarked.

He also pointed out that banks and brokerage houses send in reports of your 1099, which the IRS will compare. “If you forget a 1099, it will cause the IRS to pull it out of the pile.”

The best way to lower your odds further is by following the advice of IRS spokesman Robert Marvin: “Taxpayers should take deductions and credits that they are legitimately entitled to and that make economic sense,” Marvin said. “They also should keep accurate books and records.”

For filers who do that, not even an audit should scare them.

How to keep retirement savings on track after leaving a job

Nagel — Wed, 31 Jan 2007 11:48:00 +0000

More great information written by Robert Powell in IBD.
Call it a mistake waiting to happen. Every year millions of workers who retire or switch jobs must figure out what to do with money in their 401(k) plan. Should they leave the money with their former employer? Should they cash out? Should they transfer the money to their new employer’s plan? Should they roll over the money into an IRA?

Big money may be at stake in the answer to those questions. And lots of people still make costly mistakes even when they answer the questions correctly.

Consider: Some 7.5 million Americans took about $440 billion in distributions from their 401(k) plans in 2004, according to Brightworks Partners research. Of the 7.5 million, 6.25 million were job changers and 1.25 million retired. Of the 7.5 million, 55% had 401(k) balances greater than $5,000.

Where did the money go? About 45% — representing some $200 billion — rolled their 401(k) into an IRA, while 32% left their money in their former employer’s plan, 20% withdrew the money and paid the taxes due on that distribution, 9% transferred their money to a retirement plan at their new employer and 6% purchased an annuity or arranged to have the money paid in installments over a period of time.

To the untrained eye, all that 401(k) money sloshed to and fro problem free. Nothing could be further from the truth.

According to Mercer HR Services, many workers get off the retirement-savings track when faced with the what-to-do-with-my 401(k) question. For one, many workers — especially those who had 401(k) balances of less than $5,000 — took taxable cash distributions. In fact, more than 40% of distributions from a 401(k) plan were taken in cash, according to the Federal Reserve Board’s 2004 Survey of Consumer Finances.

Taxable cash distributions

A new law — the automatic IRA rollover law — was put in place in 2005 to address what the U.S. Department of Labor called leakage, small-balance 401(k) owners cashing in their nest eggs. With that law, workers who have between $1,000 and $5,000 in their 401(k) and leave their employer will have their money automatically rolled over to an IRA unless they choose otherwise. And to some degree, that new law has helped reduce the problem of cash-outs, David Wray, president of the Profit Sharing/401(k) Council (PSCA).

According to a Centier Bank study of small-balance plans published in a PSCA newsletter, only 2.7% of workers cashed out of their 401(k) plans over a 17-month period following the enactment of the automatic IRA rollover law. What’s more, 12% of workers had their 401(k) automatically transferred into what’s officially called a safe harbor IRA. That’s an IRA in which the worker’s money is invested in funds designed to preserve principal and provide a reasonable rate of return. (One problem with this model is that the safe harbor IRA may or may not sync up with the investor’s investment goals so it’s imperative that workers examine whether the investments in the safe harbor IRA make sense or not.)

The bigger problem with small balance transfers, however, is this. James Boyd of Centier Bank noted that there’s a large percentage of what the industry calls “no-contacts,” that is, missing or nonresponsive 401(k) participants. Some 80% of small-balance participants who left their employer were labeled as “no contacts” in the Centier Bank study. And in the extreme, funds in those plans could be escheated by a state as unclaimed property. And that’s just another form of leakage, according to Boyd.

Paperwork problems

Even workers who want to roll over their 401(k) plan to an IRA can fly off the savings track, according Mercer HR Services. Indeed, the process to transfer those assets is downright difficult and onerous.

For instance, about one-third of the forms required to complete the transfer are not completed correctly. In other cases, the forms are lost in transit. Workers often spend countless days if not weeks completing, correcting and tracking down paperwork and calling multiple plan sponsors. Mercer estimates that the traditional process of requesting and completing an IRA rollover could take up to two to three weeks.

So what can be done to head off those problems? First, make sure an IRA rollover is the best option. “Before deciding to roll over 401(k) assets to an IRA, people should make sure that they are not missing out on other benefits by rolling over the assets,” Denise Appleby of Appleby Retirement Consulting said in an e-mail.

Appleby said there are two cases when a worker might choose something other than a rollover. If a person has employer stock in a qualified plan account that has been highly appreciated since they were first added to the account, Appleby said it may be more beneficial to have those stocks credited to a regular savings account instead of an IRA, as that person would then be able to apply capital gains treatment to the earnings. “Rolling these stocks to an IRA means that the individual would pay ordinary income tax on any distribution of the earnings from the traditional IRA, instead of the capital gains rate,” she said.

In another case, Appleby said if the balance in the qualified plan includes after-tax amounts, the person should consider whether it would be more beneficial to have that amount credited to a regular account, instead of being rolled over to an IRA.

“Rolling over employer stocks and after-tax amounts are not necessarily poor choices, and may even be suitable for some individuals,” she said. “However, many individuals’ roll over these amounts unknowingly and attempt to reverse the rollover, but then it’s too late.’

Once the decision to do an IRA rollover as been made, Ed Slott, author of “Your Complete Retirement Planning Road Map,” suggests that the “best way to get this done right is to engage the people that have the most to gain from having you as their customer.”

Slott said workers leaving a company should contact either the IRA custodian or the financial adviser who will be investing the IRA funds early in the process. “They will make sure the rollover is done properly,” he said. “They will be gaining a new customer so they will be more than happy to handle all the paperwork.”

Slott said workers should never leave it to the plan sponsor or plan provider to help with the paperwork. “They generally do not have competent help and just really want to get rid of you,” he wrote in an e-mail. “The people at the plan don’t work for you. They work for the plan so they could really care less if the transfer goes as you would have liked.”

Appleby agrees. “Before completing the rollover request, the individual should have it, and the account statement, reviewed by a financial adviser who is proficient in the area of rollovers and IRA management, to ensure that the proper elections are made on the forms, and to help ensure that the options selected are the ones more suitable for the individual’s financial profile,” she said.

No matter who does the rollover, make sure it is done as a trustee-to-trustee transfer (a direct rollover) where the funds go directly from the plan to the IRA, Slott said. “If the funds are withdrawn and then rolled over to the IRA then a 20% withholding tax will be taken from the funds and it may be tough to find the money to make up the 20% to complete the rollover,” he said. “With a direct rollover, 100% of your company plan funds go to your IRA with no tax withholding.”

What’s more, with a direct rollover, the worker doesn’t have to worry about depositing the retirement money into an IRA within the 60-day grace period. If the taxpayer doesn’t roll the retirement money into an IRA within 60 days, the taxpayer will pay a penalty on the distribution and possibly more taxes.

After requesting the withdrawal/rollover

After requesting the withdrawal, Appleby said the person should take the following steps:

Find out from the plan administrator when the transaction will be processed. Some plan administrators process distributions during certain periods, like the end of every quarter or only after a certain number of days have passed since the end of employment.

Check back with the plan administrator about a week before the due date to make sure it is on track.

Check with the receiving financial institution, not only to make sure the funds were received but that they were credited to the right account. There are countless instances where assets are erroneously credited to regular accounts instead of IRAs. Often, the error is not detected until months or even years later, creating an accounting nightmare for everyone involved.

Also, check to make sure that amounts that are credited to IRAs are processed properly. For instance, check to make sure it was processed as a rollover contribution, which is reported on IRS Form 5498 and not as a nonreportable transfer.

Even workers who do IRA rollovers get off retirement-savings track

Appleby said most qualified plans liquidate the plan assets and complete the rollover in cash. This means that the money will likely sit in cash or a low-interest money-market fund in the IRA, she said.

Here is more great information from Investors Business Daily

In some cases, the money sits in cash because of inertia; investors have a proclivity to do nothing. In other cases, the money sits in cash because investors don’t know how to re-allocate their funds or find funds that were similar to the ones in their 401(k) plan.

“Individuals should make the money work for them by having it invested in assets that can produce higher returns,” said Appleby. And they should consider hiring an adviser to help with that process, say both Appleby and Slott.

For more on rolling over you 401k click here.

Tax Deductions You Won’t Believe

Nagel — Sun, 28 Jan 2007 14:08:36 +0000

We all have friends, family members or neighbors who have had some questionable tax deductions, but in the following article these tax deductions take the cake.

Bankrate.com, by Jay MacDonald

Have you heard the one about the $300 breast pump? The male model? The pimped-out Amish buggy?

That’s right — Bankrate’s back with another nine of the craziest tax write-offs you’ve ever heard of, in the hope it will make paying your 2006 federal income tax a little bit easier.

For our last installment of the nine weirdest write-offs, we combed the country collecting stories from certified public accountants about the craziest tax deductions they’d ever seen. The search turned up plenty of ingenious ways in which taxpayers have tried to justify deducting everything from ostrich breeding to sperm donations to dog food.

Dogs once again get their due in this year’s collection. While our pets may seem like part of the family, as we will see, attempts to treat them as actual dependents — or more outrageously, subcontractors — simply won’t fly with the Internal Revenue Service.

It’s never a good idea to tempt fate by trying to slide one by Uncle Sam. Serious consequences may result from underreporting income, filing a false or erroneous claim, or attempting to make up your own personal tax rules.

Deductions in the tax code tend to fall into two broad categories, according to John Barghini, a CPA and partner in Hansen, Jergenson, Nergaard & Co. LLP of Minneapolis.

“Deductions are primarily related to business activities or where our government wants to reward us for being family people, as in dependent and day care deductions,” he says.

While it may seem like deductions would be easy to abuse, Barghini says most taxpayers don’t consider the reward worth the risk.

“I think there is more unreported income than there are overstated deductions,” he says. “The deductions where people tend to fudge it are in charitable contributions. And some you can’t fudge, because things like mortgage interest or real estate taxes are typically reported to the IRS.”

Ah, but that doesn’t mean we don’t try.

Daffy deductions
Here are nine of the craziest write-offs we’ve ever heard of. Warning: Don’t try these at home!

Nine craziest deductions

1. Hidden asset
Elizabeth Dittrick of Dittrick & Associates in Cleveland was a staff accountant with Arthur Andersen when she witnessed a particularly uncomfortable client meeting with a married couple. The deduction was legitimate; it was the underlying asset that proved to be the problem.

“We were going over their tax information and the tax manager asked the gentleman, ‘Now what about the mortgage interest deduction for the condo in Utah?’ Unfortunately, the wife didn’t know about the condo in Utah, where he had set up his mistress. It was a big ‘oops’ moment. There was this stony silence in the room. It was absolutely awful,” she recalls.

2. Dog-ductions, part 1
What dog lover hasn’t melted when man’s best friend gives him that baleful look as he heads off to work? One taxpayer decided to create his own tax rule to ease the pain: “There is one individual who tried to deduct a day care expense for their dog,” says Barghini. “The person was working and they didn’t feel that the dog should be left alone, so they hired somebody to watch the dog, then tried to take a day care tax credit for the doggy-sitting. The dog clearly was an economic dependent, but not for tax purposes.

3. Now THAT’S a super!
Sure, it’s easy to find bad things to say about landlords, but what about all the good things they do? Dittrick admits that while she liked the sentiment, she wasn’t buying this landlord’s story for a minute: “There was a guy who had rental property and tried to deduct a limousine charge in the year he got married by claiming that he had taken his renters out for a night on the town, when I knew that it was for the wedding,” she says. “I ended up refusing to sign the return.”

4. At that price, it should change diapers, too
CPA Ruth Ann Michnay of St. Paul, Minn., thought she might have been out of touch with maternity technology on this one: “I once had a young mother as a client who listed a breast pump at over $300,” she says. “My kids are grown up but I never remember them being that expensive, so my first reaction was that it must have been some medical situation with the child. You never know. But no, it was strictly for her convenience to operate. She was claiming it as a medical expense. I talked her out of it.”

5. Dog-ductions, part 2
You think it’s hard to find good help? Tell it to the IRS. Even the CPA source for this one wished to remain anonymous: “A landscaper who was under audit with the IRS had deducted the expense of their dog because he would pull the wagon on landscaping jobs. They felt he was out there helping. He may have been listed as an independent contractor.”6. Me, I’m a freelance food critic
There are those taxpayers who mistakenly believe that if their hobbies come anywhere close to their means of making a living, what they spend on it should be deductible as a business expense. And perhaps it is — on Mars! New York CPA Alan J. Straus knew of a Hollywood set electrician who tried to write off the cost of buying and renting movie videos and DVDs, and a professor of Italian culture and European art who tried to deduct his theater and concert tickets.

Then again, sometimes what appears to be a flagrantly crazy write-off on paper will actually turn out to be permissible. Witness this unlikely deduction from Alan Dlugash, a CPA with the New York firm of Marks Paneth & Shron LLP: “A client not only tried to, but properly did deduct several thousands of dollars of comic book purchases. He was a university doctoral student, doing his thesis in his field of expertise … having to do with the relationship of comic books to the societal values of the era.” D’oh!

7. Dog-ductions, part 3
Barghini had one enterprising client who believed he’d found a doggone great way to boost his charitable deduction and thus shave a little off his taxes. “An individual who bred dogs was looking for a tax deduction, so he thought that he would give one of his dogs to the Humane Society and take a deduction for it. They were valuable dogs but he bred it, so he could not take a tax deduction for it.” The reason? Barghini explains that the tax code allows you to depreciate over time such breeding stock as cattle, race horses and yes, even show dogs, provided you are breeding them with the intent to sell the offspring. In these instances, you may depreciate the breeding male or female, but not the offspring.

8. Clothes (deductions) make the man
Here’s a line of thought we’ve all tried on at one time or another: I have to look professional at work so why shouldn’t I deduct the cost of my suits, shoes and ties? And of course that is perfectly allowable — on Uranus! Here on Earth however, a less generous tax rule applies, as one of Barghini’s clients found out: “I was dealing with a male model who wanted to write off his entire wardrobe because he needed to look good all the time. There are very strict rules about writing off clothing. Basically, if you are required to wear a uniform of a nature that you’re not going to wear it out in public socially, such as an auto mechanic’s blue jumpsuit with a patch that says ‘John’ or nursing clothes, you can write them off. It’s basically clothes that you’re only going to wear at work; you’d be embarrassed to go to the bar in them. If it’s clothes that you can wear on a daily basis, you cannot write them off. Businessmen or businesswomen trying to write off their suits will not fly.”

9. Pimp my buggy
This one was so outlandish that Dittrick actually faxed us the two-page itemized receipt to prove it: “We live in an Amish community here and we had an Amish guy who tried to take a deduction for his buggy with velvet interior, the whole works. It was tricked out. He was legitimately Amish, but with all the accoutrements on this buggy, when they’re supposed to live the simple life, it was absolutely hilarious,” she says.
How pimped out was his ride? According to the receipt, this baby came equipped with dash lights, kick plates, tinted windshield, speedometer, hydraulic brakes and dimmer switches. The standard buggy costs $2,675; this pimped-out version ran $3,545.

“He could deduct the buggy of course, since it was used for business, but on that one, we had to pick and choose what we were going to deduct,” Dittrick says. “But the Amish teenagers do go through a period where they sew their wild oats, so to speak, and put the fuzzy dice and boom boxes in them. Every so often in the police blotters up here you’ll see a complaint about a buggy with music playing.”

Tax Tips

Nagel — Sat, 27 Jan 2007 12:57:06 +0000

Below are some more tax tips and breaks to look out for when compiling your 2006 tax return for the IRS.

You can deduct your state and local sales taxes instead of your state and local income taxes.

The IRS has estimates of your sales taxes, but if you purchased big ticket item you had better find the receipt.
Giving clothes to Goodwill or donating your old car used to be a great deduction. Now the cost basis for the car will not be the Blue Book Value, but what the charity sold the car for. Plus you can’t count old ratty clothes as a decduction–they say the most in a good used condition.
Many American donate money and gifts to charities so make sure you have all your donations documented.

Go Green and get tax breaks

It is becoming more and more mainstream to buy a hybrid car or fix up your home for better energy efficiency. Look into your state tax breaks as well as the federal ones because they can add up to a huge deduction.

Education Can be Rewarded

Tuition deduction can let you write off as much as $4k so make sure you compile all your records proving your education expenses.
Here’s some more on taxes.

PfBlog on free tax filing.