LAST-MINUTE TAX SAVERS

Here's how to sharpen your filing skills and get some of the deductions you're entitled to

another car for personal use,” says Eaton.

NONTAXABLE INCOME
Reimbursed expenses for business use of your personal car typically are not considered taxable income. Similarly, other types of cash that flowed in during the year-gifts, for example-won’t be taxed. “Many people aren’t aware of nontaxable income,” says Stallworth. “You don’t owe income tax on child support, on life insurance proceeds or on money you inherit.” (Note that the individual laws vary from state to state. ) As it is, Uncle Sam ta
kes a large enough slice of the pie without you giving him an even bigger piece.

TAX SAVINGS NOW OR LATER: Traditional vs. Roth IRAs
 

Traditional

Roth

Maximum Annual Contribution $2,000 per individual; $4,000 per couple $2,000 per individual; $4,000 per couple (less contributions to traditional IRA)
Age Requirement No contributions after age 70 1/2 Contributions after age 70 1/2 allowed
Income Requirements None Phased out for married couples with AGI over $150,000 and for singles with AGI over $95,000
Tax Stats Tax deductible (unless you participate in a company retirement plan, which makes deductibility subject to income limitations). Contributions are with after-tax dollars; no tax deductions, but withdrawals are tax-free.
Withdrawal Penalties Penalty-free any time after age 59 1/2 but taxed as regular income; mandatory annual withdrawals begin after age
70 1/2.
Tax- and penalty-free any time after age 59 1/2 as long as IRA has been held for five years; no mandatory withdrawal age.
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