DENVER—With the year’s tax deadline looming around the corner, what key tips and traps should taxpayers should know? According to the University of Denver’s Daniels College of Business’ School of Accountancy Director, Sharon Lassar, PhD, there are five important tax tips that every consumer should watch for this year.
“Not paying close attention to a few important 2013 tax loopholes and advantages could cost you a lot of money this year,” said Professor Lassar. “There are a few crucial tax benefits that will expire, or are new, this year that every tax payer should pay close attention to when preparing their 2013 taxes. These have the potential to save you a lot of money on your federal taxes.”
Five important tax tips to watch:
- File your taxes as quickly as possible: Financial fraud and data breaches are on the rise this year, so it is important that you file your taxes as quickly as possible to ensure that a thief doesn’t file on your behalf. “The earlier you file your taxes, the better. File your taxes before somebody else does.”
- Sales or income tax deduction: This year, you can deduct either your state sales tax, or your federal income tax. In a year when you made a large purchase, such as a car or a boat, it may be better to deduct the sales tax. “Make sure you look through old receipts to factor in any big purchases from the year.”
- Mortgage Deduction: In a year when you buy or sell a home, it is important to remember that you have paid property taxes on both of the residences that you owned in 2013. This means that you can write off both of these property taxes—not just the property tax for the house you currently reside. “Many homebuyers forget this simple deduction when they buy or sell a house. But with a little attention to details, you can save a lot of money.”
- Home mortgage insurance: This year, your home mortgage insurance is fully deductible, but in 2014 the deduction will no longer exist. As long as the equity in your home is below 20%, you should purchase home mortgage insurance, and you qualify for the tax deduction. “Make sure you review your equity position this year, and if your equity is above 20%, you should consider cancelling your equity insurance all together.”
- Affordable Care Act: One of the more complicated provisions for taxpayers this year is the additional 3.8% tax on unearned income to help pay for the Affordable Care Act. “This new tax is complicated—even for the most seasoned tax professional. The formula itself has 19 pages of instructions. If you haven’t done so already, you may want to consider buying a computer or online program that will help with the calculations related to this new tax.”
Founded in 1908, The Daniels College of Business is the top-ranked business college at the University of Denver, one of the country’s premier private universities. Daniels is globally recognized as a leader in providing an immersive and engaged business education. Grounded in ethics, our educational experience not only teaches students, it transforms lives. As a learning community, our students, faculty and staff nurture service, outreach and personal integrity as we proactively tackle the tough business issues of our day.
In May 2013, Bloomberg Businessweek named Daniels as the one of the top ten undergraduate business programs in the country. In January 2013, U.S. News & World Report ranked the Master of Science and Executive Master of Science degrees offered by the College’s Franklin L. Burns School of Real Estate and Construction Management No. 65 out of 213 online business programs. In October 2012, the Financial Times, a major London-based business newspaper, ranked the University of Denver’s Daniels College of Business Executive MBA (EMBA) Program as one of the world’s top 100 best, marking the fifth consecutive year that Daniels was included in the Financial Times EMBA rankings. In November, 2011, Global CEO Magazine ranked Daniels as the top business school in the Western U.S.