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Plan Well, Retire Well

Saving and investing your money

Tax Tips in the Summer


Don't do well under pressure? Find it hard to think about saving money for retirement after the holiday season? Well, then now is the time to plan for taxes!

While it may seem like an odd season to plan for taxes, the summer can be timely. Here are some financial strategies that may help you when you sit down to pay taxes in April 2013 IF you do them now.

Tax Folder for 2012: If you haven't already done so, set-up a file folder for all tax-related information for 2012. Then, when you have a receipt or other paperwork that you want to find in April, you will have a designated place to put it now.

Save Receipts for Charitable Donations: Many of us use the summer to clean out closets, garages and basements. When you donate that "good but not useful to you stuff" to a charitable organization, you may qualify for a tax deduction. Charitable contributions are deductible only if you itemize deductions on Form 1040, Schedule A. You will need written documentation for donations worth $250 or more. See IRS Publication 526, Charitable Contributions for more details.

Tax Credit for Summer Camps: Do you have a child less than 13 years of age and do you work or are looking for work? Then you may qualify for a tax credit for care for your children, including summer camps. The cost of day camp may count as an expense; however, expenses for overnight camps do not qualify.

In fact, whether your childcare provider is a sitter at your home or a daycare facility outside the home, you'll get some tax benefit if you qualify for the credit. The Child and Dependent Care Credit is available for expenses incurred during the summer and throughout the rest of the year. The credit can be up to 35 percent of your qualifying expenses, depending on your income. For more information check out IRS Publication 503, Child and Dependent Care Expenses.

Save for Retirement: I find it easier to think about saving for retirement in the summer than in February! If you do too, now is a good time to consider increasing your contribution to a tax-advantaged savings plan either at work or in an IRA. Increasing your savings for retirement NOW means that you will gain in April at tax-paying time. For more information, view IRA Basics.

For more information about tax publications or questions, visit www.irs.gov or call for forms at 800-TAX-FORM (800-829-3676.)



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