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Tax Tips


  • Record Retention:  Federal law requires you to maintain copies of your tax returns and supporting documentation for 3 years.  However, if the IRS believes there is significant underreporting of your income or believes there may be fraud, it may go back 6 years in an audit.
  • If you have sold your primary residence, you may be able to exclude up to $250,000 (single) and $500,000 (married filing jointly) of the gain.
  • If you have recently been married or divorced, make sure the name on your tax return is the same as with the Social Security Administration.  A mismatch will delay the electronic filing of your return.  You can create an account with the SSA to verify your information.
  • Qualified Tuition Programs (529b plans) – earnings from these accounts are tax-free. This represents an opportunity to accumulate funds for children and grandchildren's college education tax-free. Gifts to 529b accounts can exceed the regular annual gift maximum of $15,000. This represents a manner to reduce potential estate taxes.
  • The IRS requires a Social Security number for all dependents. Without it the IRS can deny personal exemption, child care or dependent care credit.
  • IRA and Keogh Distributions. Minimum distributions are generally required when you are seventy and one-half. The first distribution may be delayed until April 1 of the year following the year you reach 70 and one-half. In subsequent years the distribution must be made an annual basis. Careful planning can determine the most advantageous year to take the first distribution.


  • In a period of volatile stock prices you may be able to reduce your taxable income by moving out of unfavorable investments and shift to investments you are more comfortable with. Remember a tax loss only occurs upon the sale of the security. Recognized stock losses are used to offset capital gains. Excess capital losses can be used to offset up to $3,000 of ordinary income. If the loss exceeds $3,000 the balance of the loss is carried forward to future years. Because a capital loss is used too offset ordinary income it is advantageous to recognize a capital loss in one year and defer long term gains to the following year.
  • You can write off the cost of a worthless security as a capital loss. In order to take the loss you must have evidence that the security is worthless, company has liquidated or gone bankrupt.


  • Roth IRA's are non deductible but grow tax free.
  • Roth IRA's can used in college funding planning.
  • Traditional IRA's are deductible but distributions are taxable.


  • Utilize Section 179, expensing of business asset purchases, $1,040,000 in 2020.
  • Start-up costs- If you estabilished your business and you incurred expenses before the business actually began operating (start-up costs), you may be able to deduct these expenses. As long as the business is operating, you can elect to currently deduct up to $5,000 of start-up expenses. Once start-up costs exceed $50,000 the $5,000 limit is reduced dollar for dollar. The remainder of the costs must be deducted ratably over a 180-month period.
  • The Disabled Access Tax Credit allows $5,000 of expenditures annually for purchase of equipment to make your building more accessible to the handicapped.