Happy May Day. For many, this is a day to celebrate workers.
Of course, a variation of the holiday's name is also a distress call. And a lot of folks probably put out mayday calls during filing season.
Although we're well past the April 15 tax deadline, some of you might still need some help. So here are a few tips and other May Tax Moves to make in the next few weeks.
First, for my fellow procrastinators, get to work on your 2012 tax return.
Yes, you were wise to take some extra time to complete your tax return in an unhurried and thorough way. But you don't have to wait until Oct. 15 to send in your 1040. The IRS will happily accept your completed return any time before
that absolutely final deadline.
To help wrap up your 2012 taxes ASAP, check out the Daily Tax Tips that ran in January, February, March and April and the Weekly Tax Tips that are running now.
If, however, you were among the majority that did get last year's taxes done on time, May is a great time to begin working on ways to reduce your 2013 tax bill.
Start at home. Residential improvements, to the structure as well as landscaping, can not only make it a nicer place to live, but also increase your property's basis so that you'll be sure all your eventual sale profit is excluded from capital gains taxes.
And some energy-efficient upgrades also could get you a tax credit on your 2013 taxes.
During your home improvement process, you'll likely discover some items you don't want or need. Give them to your favorite charity's thrift shop. If you itemize, you can claim them the donations as tax deductions.
If you got a big refund or had to write the U.S. Treasury a big check, adjust your payroll withholding.
Contribute to your retirement account. If it's a traditional IRA, you might be able to deduct it. If it's a Roth, your added money will start earning sooner.
Buy your mom a nice gift for Mother's Day.
OK, that's not really a tax tip, but it's good advice.
And if you're already helping out your mom, you might be eligible for some tax benefits in addition to simply being a good child.
Those are just a few of the May Tax Moves
you'll find over there in the ol' blog's right column under the heading of the same name.
AWB
When determining cost basis it’s also important to consider any benefits in the original sale transaction. For example, according to the IRS, sellers can pay for the buyer’s mortgage points. The cost, not necessarily the benefits of a lowered interest rate, is reduced by the amount paid for the points.
Also, since anything that materially adds value to a home can be deducted, paying for a spiritual cleansing if your house is haunted might not be allowable as cost basis due to its intangible nature. Maybe that’s why houses stay haunted. Whether or not a charitable donation not directly linked to a cleansing is deductible on an income tax filing is another story and possibly debatable.
One more thing; maintenance expenses are deductible if the home is a rental property. The permanence of rental agreements, and the amount of space rented in a primary residence may or may not affect the legitimacy and amount of maintenance expenses. Probably best to check with the IRS or an accountant on that.