Avoiding Year-End Tax Traps

Making the right moves before December 31 can shave thousands off your bill to Uncle Sam

for any overpaid Society Security taxes withheld from your wages by both employers.

  • If you own property, make sure that you distinguish deductible real property taxes from assessments paid for repairs to streets, sidewalks, sewers, gutters, and other improvements that benefit specific properties in specific neighborhoods.
  • Remember that only a portion of your Social Security benefits may be taxable. If your income doesn’t exceed a certain amount, then none of it may be taxable. Don’t miss certain end-of-the-year deadlines to set up IRA contributions.
  • Keep
    copies of all documents that you send to the IRS.
  • And always sign your documents.
  • SOURCE: THE ERNST & YOUNG TAX GUIDE 2003

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