Welcome To The Long View

The Long View

Welcome to the very first post of our new blog The Long View!  This project has been in the works for quite some time as we have searched for new ways to reach out to friends, family and any other interested readers to share our passion for financial planning, economics and everything in between!  We hope you find the posts entertaining and helpful as you journey forward on the path to financial success and well-being.

Each month a member of the Longview Team will sign on to present you with thought-provoking facts and planning ideas, nuggets of financial wisdom, market commentary or the latest happenings at Longview.   Topics will cover a broad range from anything such as discussing crucial mistakes or successes of Whitney Houston’s estate plan to tips on how to raise and encourage financially-fit children.  From time to time you may also find us using videos, audio clips, and other online media to make the blog experience more interesting and useful to you.

If there are any topics you would like to learn more about, we would love to hear from you! Please email your idea to us at info@longviewfa.com  and we will consider it for future posts.

We officially welcome you to The Long View and hope you enjoy it as much as we know we will!

Wishing you financial success,

The Longview Team

4 Tax Deductions/Credits to Reduce Your Tax Bill

 

By Mitch Marsden
Financial Planner

Once again it is that time of the year when we sit down with our tax preparers or tax prep software and review just how much money we are handing over to Uncle Sam.  Doesn’t it just make you cringe?  On the bright side, having to pay taxes at least means there is income or gains in some form or another, a blessing some can’t lay claim to.

Here are three deductions and one credit you or your family members may be able to take advantage of to help reduce the cash shelled out to the taxman.

1. Medical Deductions.  You may already be doing this to the max, but take a look at a few of the expenses listed below that the IRS allows you to include as medical expenses.  Make sure not to miss them if you or your loved ones itemize deductions!

  • Medical and Dental insurance premiums paid with your own after-tax money, including Medicare  premiums for Part B, Part D or other Medicare supplement insurance
  • Long-term care insurance premiums (subject to certain limitations)
  • Transportation expenses that are necessary for medical care (not just for general health). This could include something as simple as trips to the hospital or doctor.  The standard mileage rate for 2011 was 19 cents a mile from January 1 to June 30 and 23.5 cents a mile from July 1 to December 31
  • Medical expenses paid on behalf of “qualifying relatives” even if you are not able to claim them as a dependent on your tax return
  • Other overlooked expenses such as for eyeglasses needed for medical reasons, hearing aids, pregnancy test kit, birth control pills, wheelchair and a number of other tools, equipment, and services for medical purposes

These are just a few examples of what the IRS has listed in 2011 Publication 502 which can be accessed at http://www.irs.gov/pub/irs-pdf/p502.pdf.  Be sure to work with your tax preparer to understand and follow the rules in order to take the appropriate deductions.

2. Investment Advisory Fees. If you paid fees to an investment advisor for managing or advising you on your investments, you may include these fees as a miscellaneous itemized deduction on your Schedule A.  Note that this does not include commissions you may have paid to a broker or advisor on the purchase or sale of investments.  Fees that are paid directly from a retirement account are also not includible.

3. Alabama State Tax Deduction for 2011 Contributions & Rollovers to AL State 529 Plan.  For Alabamians, if you made a contribution or rollover to a CollegeCounts Alabama 529 plan in 2011, you may take a deduction for the same up to $5,000 ($10,000 for couples married filing jointly) on your Alabama state income tax return.  This is also true for contributions even if you were not the owner of the 529 account.  If you live outside of Alabama, check into your own state’s 529 tax rules as many offer a similar tax benefit to their residents.

4. Retirement Saver’s Credit.  This little known tax credit rewards taxpayers for making contributions to an employer-sponsored retirement plan or to an IRA (Roth or Traditional).  The credit ranges from 10% to 50% of the contribution, subject to limits, depending on the filing status and adjusted gross income level.  The credit also only applies to single filers with income under $28,250 and to couples married filing jointly with income below $56,500 in 2011.  This credit is an additional bonus to the other great tax advantages offered by retirement plans.

If you are not eligible for the credit, but you know adult children, other family members or friends that may be eligible, share the good news with them.  They can even still make a 2011 IRA contribution until April 17th, 2012 to qualify for the 2011 credit.  It is also an excellent way to encourage them to make long-term savings and investments today.

Good luck to you as you navigate this year’s tax season.  Remember, tax planning is an all-year-round process, so begin thinking today about how to legally and rightfully minimize your 2012 tax burden.

Mitch Marsden is a part of the planning team at Longview Financial Advisors in Huntsville, Alabama.  He is a graduate of the University of Utah with a degree in Financial Planning as well as a candidate for CFP Board certification. Mitch can be reached via e-mail at mitch@longviewfa.com.

Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by  Longview Financial Advisors, Inc.), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Longview Financial Advisors, Inc.. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Longview Financial Advisors, Inc. is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of the Longview Financial Advisors, Inc.’s current written disclosure statement discussing our advisory services and fees is available for review upon request.

Posted in Tax