The Single Life
For singles, tax time may be as welcome as Valentines’ Day was or a blind date.
And you can bet that if Uncle Sam does come calling (is Uncle Sam single? I don’t know) he’s not riding in on a white horse dressed in shining armor. Odds are, he’ll be dressed in a stiff suit banging on a computer while you hold your breath wondering if you fabulous new black boots could be considered a business deduction.
I have to cop to the fact that I’m married, but I’m here to stand up for the singles’ crew and offer some tax saving tips you should be taking advantage of if you’re not already.
Your House: If you own it, your swinging bachelor (or bachelorette) pad is tax deductible. Singles can deduct mortgage interest and property taxes just like your annoying married friends. Home ownership is great for your tax bill (and for your love life IMO) – it can slash your tax burden significantly because every penny you spend on paying interest on your mortgage can be deducted.
Your Retirement: I know, I know. You’re too hip and single to be worried about being 65. Wake up, people! Time to start saving for retirement so you can reap the tax benefits. Your 401K contributions reduce your taxes owed and can help get you a bigger refund. You can even sock away money in a qualified IRA up until April 15 if your employer doesn’t offer a 401K plan.
Your paycheck: It’s like giving yourself a raise. The odds are pretty good that you’re having too much tax taken out of your paycheck every payday. The evidence is clear if you have a big refund coming. Almost 80 percent of taxpayers get a refund. In 2009, the average refund topped $2,700. Filing a new W-4 form with your employer (your HR department will have it) will insure that you get more of your money when you earn it.
Your education: Investing in you is always a smart idea (and only makes you more attractive to the opposite sex). If you’re paying your own tuition for a graduate course or other training, you may qualify for a Lifetime Learning Credit that’s worth 20% of up to $10,000 of qualifying expenses.
Your job hunt: It’s tough out there and finding a new job in today’s economy is no easy thing. But as long as you’re looking for a new gig in the same line of work, you can deduct job-hunting costs (resumes, recruiter, even phone bills), including travel expenses such as the cost of food, lodging and transportation, if you have to head out of town.
Your move: Congrats! Your job hunt (see above) was a success. Now you can cash in on your moving expenses. If the new job is at least 50 miles farther from your old home than your old job was, you can deduct the cost of the move, even if you don’t itemize expenses. If it’s your first job, the mileage test is met if the new job is at least 50 miles away from your old home.
Your good deeds: So what if you couldn’t get a date on Saturday night. Go out and help someone less fortunate than you and you’ll be able to deduct expenses related to your charitable work such as mileage to deliver meals to the elderly, expenses related to being a scout leader or going to a charitable organization’s regional meeting as their representative.
Your (gulp!) marriage: Say it isn’t so! If you’re giving up the single life and getting hitched, before the wedding, get together with your soon-to-be ball and chain and both your W-4 forms and figure how to arrange withholding from your paychecks to match your new tax status.
So…a little advice from this married tax blogger. Single is fabulous! Enjoy every minute of it, no matter how long it lasts. And please don’t complain about married people getting a better deal on their taxes. Believe me, we have to have something to get excited about.