There has been little normalcy in financial matters the last couple of years, which extends to tax strategies.
Several factors are affecting traditional year-end decisions that taxpayers make to reduce their burden - whether they are affluent or jobless. Here’s what tax experts suggest:
Out of work. Anything you spend on a job search can be deducted if you itemize. Think resumes, mailing costs, even air travel that is not reimbursed.
If you relocate for a job, you can claim moving expenses.
If you or your children are going to college, you can collect a tax credit of up to $2,500 under the American Opportunity Tax Credit. If you pick up a course to enhance your skills, you could claim up to $2,000 of what you have spent.
If you set up a business after losing a job and buy health insurance on your own, the costs can be deducted. But there is no deduction for COBRA coverage through a former employer because a government subsidy is built into that, said Bob Scharin, senior tax analyst at the tax and accounting business of Thomson Reuters.
For investors. Mark Luscombe, CCH Inc. federal tax analyst, says idends and capital gains could end up being taxed 20 percent or more.
So if it makes sense from an investment point of view to sell stocks, bonds, or other instruments this year and next, investors could save themselves taxes. That is especially true of people in the 10 percent to 15 percent tax bracket, who pay no capital-gains taxes now, Scharin said.
For the affluent. The government temporarily reduced …
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