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It's Tax Time Again
Expert Help for Families By Megan L. Fowler
Some other deductions parents should pay close attention to are education deductions and credits, student loan deductions and retirement benefits, Pollock says.
In terms of retirement planning, in order to get an IRA deduction, you must file a Form 1040 or Form 1040A, Woodhouse says. "You cannot claim an IRA deduction if you file a Form 1040EZ," she says.
For stay-at-home moms, Woodhouse suggests making a deductible IRA contribution of up to $3,000 even though Mom has no earned income. "If you have at least $6,000 of earned income jointly, $3,000 can be contributed to an IRA for each person for a total of $6,000," she says. "The contributions for both spouses can be made to either a regular IRA or a Roth IRA, or split between them, as long as the combined contributions don't exceed the $6,000 limit. Even if the breadwinning spouse is covered by an employer-provided retirement plan, you can still make a fully-deductible IRA contribution as long as your joint annual gross income does not exceed $150,000."
He offers some tips to better prepare you for next year's taxes. The first thing to do is to create a tax folder for the current year. This should be done at the beginning of the tax year January and maintained through December. "During the year, as the family pays bills or receives tax-related information, these items should be placed in this 'tax folder'," Mol石ays.The beginning of the year is when many of the important tax-related documents are received, and those should be put in the proper year's tax folder. Throughout the year, charitable contributions, medical bills, dental bills, payments for summer camp and daycare and purchase and sale of stocks should also be filed.
