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HAVE YOU SIGNED UP
FOR THE "UPROMISE"
When you join Upromise, you'll save
for a child's education just by doing what you normally do
everyday. Through the program, companies contribute a
portion of what you spend into a Upromise account for your
child, grandchild, or any other future college student.
Believe it or not, you'll earn college savings when you buy
toys, office supplies and gas, dine out, shop on-line - and even
buy or sell a house or get a new mortgage. To find out
more about this great program, check out
INTERESTED IN JOINING OUR
If you're a CPA who provides tax planning and preparation
services to young health care professionals, and you’d like to
find out more about The MDTAXES Network, please give us a call
(800) 471-0045 or e-mail us at email@example.com.
forget to include your mailing address.)
You're Invited to Our Complimentary Presentation
Tax and Basic Financial Planning
Issues Applicable to Young Health Care Professionals
We're proud to be hosting our annual complimentary presentation
on the tax and basic financial planning issues that affect you
and your colleagues. The presentation will be held
Wednesday evening, January 29th, in Boston.
Our presentation will focus on the tax issues
surrounding moonlighting and deducting professional expenses.
We'll also discuss many of the tax law changes that arose from the 2001
Tax Act but didn't take effect until 2002.
For more information about
please give us a call at
(800) 471-0045 or e-mail us at
THE GOVERNMENT NOW PAYS YOU WHEN YOU SAVE
FOR YOUR RETIREMENT
Believe it or not, the government will now pay
you up to $1,000 if you put away money for your retirement. Known as the
“Saver’s Credit”, you can receive a tax credit of as much as 50% of the
first $2,000 you contribute into either a retirement plan at work or your
own IRA account.
Unfortunately, this credit isn’t available to
single individuals who earn more than $25,000 or to married couples who earn
more than $50,000. And if you’re a full time student,
claimed as a dependent on someone else’s tax return, or under the age of 18,
you're not eligible for this tax credit.
You’ll receive a 50% tax credit, up to
$1,000, if you earn less than $15,000 if you're single or less than $30,000 if you’re married.
The credit is reduced to 20%, up to $400, if
you earn between $15,000 and $16,250 if you're single or between $30,000 and $32,500 if you’re
And the tax credit will be 10%, up to $200,
if you earn between $16,250 and $25,000 if you're single or between 32,500 and $50,000 if you’re
CHECKLIST TO CUT YOUR TAXES
It's not too late to cut your 2002 tax bill. Prior to December 31st:
Increase Your 401(k) and 403(b) contributions if you haven't been
contributing at the maximum rate all year. This year you
can put away up to $11,000 into your 401(k) or 403(b) plan
at work ($12,000 if you'll be 50 or older by December 31st.). Amounts contributed
reduce your taxable income and grow tax deferred.
Take a look at your withholding and instruct your employer to
withhold additional taxes if not enough
taxes have been withheld during the year and you might be hit with an
Consider selling your non-retirement investments that have decreased in value
since your capital losses can offset other capital gains realized
during the year, and then be used to offset up to $3,000 of wages and
Send in your January, 2003 mortgage payment early enough so it
will be processed prior to 12/31/02. By sending in your
mortgage payment a few weeks early, you can claim the interest
portion of that payment a full year earlier.
Clean out your closets and donate your clothing and household
items to a charitable organization since "non-cash"
contributions are deductible if you itemize. Don't forget
to get a receipt.
Pre-pay your projected state tax shortfall if you'll be
itemizing your deductions and not subject to the alternative minimum tax.
Pay off your medical bills if your total medical
expenses will exceed 7.5% of your income
Andrew Schwartz, CPA, the editor of The MDTAXES website,
was interviewed by Boston's NBC affiliate on these year end tax savings
strategies, and appeared on their 5:30 pm newscast on 11/21/02.
WHAT'S NEW FOR 2002?
Many of the provisions
included in The 2001 Tax Act signed into law by President Bush last
spring didn’t take effect until January 1, 2002. Here are a few
provisions that might affect you:
Deducting Your Student
For 2002, the amount you can earn and still deduct your student loan
interest has increased. This year, single individuals can earn up to
$65,000, and married couples can earn up to $130,000, and still claim the
student loan interest deduction of up to $2,500.
In 2002 and 2003, taxpayers can claim a deduction for qualified higher
education expenses paid during the year. The maximum deduction is $3,000
per year, and is permitted only if your income doesn’t exceed $65,000 if
you’re single or $130,000 if you’re married. This deduction is
allowed even if you don't "itemize".
Are you taking advantage of these
reduced rates? Lower rates will help you cut down on the time it takes you to
get out of debt by minimizing the interest you pay each month. Remember, the
lower the interest rate, the larger the portion of your monthly payment that
will get applied against your outstanding balances.
If you're carrying a balance on
your credit cards, there's plenty of opportunities available to cut your
interest rate. Check out CardOffers.com to find the best deals
If you still owe student
loans, see how much you'll save by consolidating your loans into one loan
with a lower interest rate at FinancialAid.com.
For more information, go to our
February, 2001 Newsletter or read through the
Chief Counsel Advice Memorandum on this issue.
You work hard to keep your credit report as clean as possible.
Even so, the current credit reporting system allows for incorrect items to
appear on your report that could adversely affect your credit score. Make sure
that the information on your credit report is accurate by ordering a free copy
of your credit report on-line at OnlineCreditInfo.com
or by purchasing a merged credit report reflecting information from all three credit reports at
TAX AND FINANCIAL PLANNING CALENDAR FOR
Saving and Investing
- For 2002, the standard deduction for a single individual is
$4,700 and for a married couple is $7,850. A person will benefit by
itemizing once allowable deductions exceed the applicable standard deduction.
Itemized deductions include state and local income taxes, real estate taxes,
mortgage interest, charitable contributions, and unreimbursed employee business
expenses. Our February, 1998
newsletter addressed the issue of itemizing your deductions.
- For 2002, the personal exemption is $3,000. Individuals will claim a
personal deduction for themselves, their spouse, and their dependents.
- The maximum earnings subject to social security taxes has increased to $87,000 in 2003 from $84,900 in 2002.
- The standard mileage rate is $.365 per mile in
2002, and will decrease to $.36 per mile in 2003. Deducting automobile expenses was
addressed in our February, 1996
- The maximum annual contribution to a 401(k) plan or a
403(b) plan has increased to $11,000 for 2002 from $10,500 in 2001.
And if you'll be 50 or older by December 31, 2002, you can contribute an extra
$1,000 into your 401(k) or 403(b) account this year.
- The maximum annual contribution to your IRA has increased to $3,000 for 2002.
And if you'll be 50 or older by December 31, 2002, you can contribute an extra
$500 into your IRA this year.
Tax and financial planning calendar for December, 2002
The Millionaire Next Door. Find out the habits of America's
wealthy. You'll be surprised at who comprises the bulk of America's millionaires.
Organize Your Finances with Quicken 2001 in a Weekend
Both these books are available at Barnes&Noble.com.
If you have a friend, colleague, or family member who is always bragging
about things they have done to cut their taxes, then
check out our new gift items with the saying - "Everything is
deductible...until you get audited!"
our CPAs everyday on
The MDTAXES Message Board
Join our Live Tax Chat on the first Wednesday of each month at 9 pm
Save for your child’s college education just by doing
what you normally do every day.
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