If you think that completing and filing a federal tax return is pretty cut-and-dried, think again.
Strategy: Weigh your options carefully. The tax elections you make—or don’t make—on your 2014 tax return can have a major impact on the bottom line. In this case, that’s Line 63, your total tax.
What sort of elections are we referring to? Here are seven prime examples.
1. Unravel tale of two taxes. The IRS gives you the option of deducting your state and local income taxes or general state and local sales taxes on your Schedule A. The right choice usually depends on whether you live in a high-income tax state, like California or New York, or a low- or no-tax state like Florida or Texas. The optional sales tax deduction was preserved for 2014 by the Tax Increase Prevention Act of 2014 (TIPA). You may claim the actual sales tax paid, supported by receipts, or use an IRS-approved table based on income and family size for your st...(register to read more)