Newspaper article THE JOURNAL RECORD

Want to Save a Fortune on Taxes? Keep Records

Newspaper article THE JOURNAL RECORD

Want to Save a Fortune on Taxes? Keep Records

Article excerpt

Psst! Want to save a fortune on your taxes? You don't need tax shelters or municipal bonds or racehorses. All you need are records.

Tax experts say that those who take the time to jot down all their deductible expenses and compile the appropriate receipts can save hundreds of dollars on their 1992 returns.

"Most people overpay their taxes because they don't get ready," said John Hewitt, chief executive officer of Jackson Hewitt Tax Service in Virginia Beach, Va. "We typically find at least one or two things that people didn't keep records for, so they don't take the deduction."

Good records will also save on tax-preparation fees, said Harvey Gettleson, tax partner at Ernst Young in Century City, Calif. Gettleson maintains that well-organized taxpayers can cut their tax-preparation fees in half.

And now, when tax forms and wage information are just starting to arrive in the mail, is the ideal time to get ready.

What do you need?

Statements from employers, banks, investment companies and the government of what you earned. You also need receipts, canceled checks and bank statements showing what you paid in deductible expenses. And you need a notebook to jot down additional deductible expenses that may be missed in your records.

The first step in preparing your tax records is to determine what they are, Hewitt notes. For most people that should involve some introspection about what they've done during the year and what it cost.

For instance, you earned wages, right? What expenses did you have during the year that allowed you to earn those wages? Did you buy trade magazines? Take business associates out to dinner? Did you have unreimbursed mileage or travel expenses? Did you make long-distance phone calls or pay for work-related education or training?

What about child care? If both you and your spouse worked in 1992 and needed to hire somebody to watch your kids, you're probably entitled to a child care credit. However, you need your baby-sitter's Social Security number or the Employer Identification Number of the day care center. And you need either canceled checks or receipts indicating how much you paid.

If you had to move during the year for work, you can deduct moving expenses _ including the realtor's commissions and closing costs on a new home up to certain limits. However, your new job has to be at least 35 miles away from your old job and you've got to stay with that employer for at least 39 weeks to claim these expenses. (If you took the job and moved late in the year and consequently haven't had time to meet the time requirement, you can still claim the expense. You'll just have to amend your return later, if you quit before the 39 weeks are up.)

If you spent money looking for a job in 1992, those costs _ including resume preparation, training and mileage _ are probably deductible. …

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