Our Certified Financial Planners answering your questions on February 13th:
~Grace Ghezzi, Benefit Consulting Group, 474-1707 ext 460
~Dennis Hebert, Strategic Wealth Advisors 234-7526
~Ted Sarenski, Blue Ocean Strategic Capital 471-2672
The topic today, federal and state income taxes:
Among the questions we're answering:
>Where's my refund? The IRS says Federal refunds are being delayed a week, in order to let the feds check for fraud.
As for New York State, no word on the refund schedule, but they tend to wait til the new budget is passed (April 1st) before starting.
>Avoiding audits. Here are some red flags for the IRS tax checkers:
~Income over $200,000. You have a 1 in 8 chance of being audited.
~Failing to report all income. This includes bank account interest, even if you don't get a form from your financial institution.
~Large charitable deductions. Besides documentation from the receiving agency, you should file form 8283 for claims over $500.
~Claiming home office deductions. The 'office' has to be for exclusive office use
~Business meals, travel, entertainment deductions
~100% business use of a vehicle
~Writing off hobby losses (you must show a profit 3 years out of five, 2 years out of 7 for horse-related)
~Failure to report foreign bank accounts (IRS reportedly collected $4.4 billion on this last year)
~Taking higher than average deductions for your income level
>Last-minute deduction.
If you didn't get all your 'to do' list on tax deductions done before the end of the year, here's a good one:
You can still put money in your retirement account, until April 17th, and claim that as part of your deductions.
The amount you put in depends on your age and your income levels. Roth IRAs have higher limits.
www.IRS.gov has more information for you.
>Tax break on retirement account
If you are over 59 and a half years old and withrdawing from pension accounts, you can get a state tax break--up to $20,000 tax free--on what you withdraw. If you die, your heirs get that state deduction when they make the required annual withdrawals, also up to $20,000 per year. If the account is split, the deduction is also split ( for example between two children, each gets a $10,000 deduction).
We answer your money questions every Monday on the Financial 411, 5 - 6:30pm on NBC-3. You can email questions in advance to money@cnycentral.com
