Filing taxes...

[CuriousPharmD]

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I've researched this topic on here a bit and all it did was was confuse me....all i want to know is what are some ways we can maximize our tax refunds (if we get any) as a pharmacist earning over 115000/yr in salary??? any help would be good....anything besides doing a 401k and ira??? also the 2500 student loan interest deduction is not available since we as pharmacists make too much money....any help???

 

[Momus]

http://taxes.about.com/od/taxplanning/u/lower_taxes.htm

For uncomplicated tax (only salaried, no business), Use software such as Turbotax... It's easy and you pay only 1/4th of an accountant fee.

 

[genesis09]

You shouldn't be expecting a tax refund at this stage of the game. As soon as you have multiple income sources, expect to pay. In a few years, I won't be surprised if I have to pay estimated taxes. Also, overdoing the deductions might land you with AMT.

 

[Momus]

I won't get any refund this year also. I am forking out $4000 or more this year because of +$10,000 profit on short term realized gain. Income is income...

Who cares if you get hit with more tax. Avoiding income to save 30 cents on a dollar is stupid... Might as well quit your job so you don't have to pay any taxes

 

[PharmD RPh]

Everyones tax situation is different and it can vary by state. A few things to keep in mind:

1. At beginning of each year go to IRS.gov and use their income tax withholding calculator and compare it to your paystub to make sure you're having enough tax withheld. I personally try to break even on my income tax return because if you're getting money back it's like giving the government an interest free loan. This however is largely a personal preference.
2. It's too late to change anything about last year at this point.
3. Things to make sure you did to avoid tax burdens
-Max out your 401k
-Max out a Roth Ira
-Buy a home smartly- I save about 6k annually in taxes from just owning a -home. You can deduct mortgage interest and property taxes and some other odd and in things
- deduct car registration tax
- make charitable donations whether it be cash or clothes to goodwill. Save receipts
- student loan interest blows bc we went to college and worked our butts off, incurred debt from it and the government wont give us a break here bc we make too much? Crazy that we penalize the people that work hard and assist those that don't


Turbotax has already set up the 2011 software that you can plug in some ball park #s to estimate your return while waiting on official w-2 forms and such. It also shows you places where you can consider trying to find deductions. Looks like I'm getting about 4k back but some new legislation is causing the irs not to start processing returns until mid feburary.

Hope this helps!

 

[charfdorn]

I've researched this topic on here a bit and all it did was was confuse me....all i want to know is what are some ways we can maximize our tax refunds (if we get any) as a pharmacist earning over 115000/yr in salary??? any help would be good....anything besides doing a 401k and ira??? also the 2500 student loan interest deduction is not available since we as pharmacists make too much money....any help???

Get married and have kids. The maximum amount for most credits and deductions goes up when you're married and most of them double. Plus, kids give you great deductions.

Give to charity, keep track of anything you spend on medical expenses (if you can get over 7.5% of your income, that's deductible), track any state or local taxes that you pay (income taxes, vehicle registration, property taxes), and max out your retirement savings.

 

[genesis09]

If you are planning on itemizing deductions, you'll have to wait until February because Schedule A won't be ready until then.

 

[rph3664]

Don't forget that license fees, malpractice insurance, uniforms (this includes the white coat), and CE fees are tax deductible! I did not know that until my tax advisor told me, and other pharmacists did not know that either.

 

[pezdispenser]

Don't forget that license fees, malpractice insurance, uniforms (this includes the white coat), and CE fees are tax deductible! I did not know that until my tax advisor told me, and other pharmacists did not know that either.

You only get a deduction for the part that exceeds 2% of your Adjusted Gross Income? i.e. >$2,000?

 

[pezdispenser]

3. Things to make sure you did to avoid tax burdens
-Max out your 401k
-Max out a Roth Ira
-Buy a home smartly- I save about 6k annually in taxes from just owning a -home. You can deduct mortgage interest and property taxes and some other odd and in things
- deduct car registration tax
- make charitable donations whether it be cash or clothes to goodwill. Save receipts
- student loan interest blows bc we went to college and worked our butts off, incurred debt from it and the government wont give us a break here bc we make too much? Crazy that we penalize the people that work hard and assist those that don't

Good points.

A Roth IRA won't reduce your taxes now, but the investment will be tax free in the future. Some of us may be ineligible to contribute to a Roth. It phases out between $105-120k MAGI for singles. Still, you can get around this by making a non-deductible contribution to a traditional IRA first, and then converting it to a Roth.

Car registration does vary by state. You can only deduct it if it's yearly and based on the car's value.

 

[MountainPharmD]

I've researched this topic on here a bit and all it did was was confuse me....all i want to know is what are some ways we can maximize our tax refunds (if we get any) as a pharmacist earning over 115000/yr in salary??? any help would be good....anything besides doing a 401k and ira??? also the 2500 student loan interest deduction is not available since we as pharmacists make too much money....any help???

Tax refund?!?!??! HAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!!!

 

[MountainPharmD]

You only get a deduction for the part that exceeds 2% of your Adjusted Gross Income? i.e. >$2,000?

Exactly what I was going to say. Trust me there is not much you can do except pay your taxes. Sure a house and kids will give you a deduction but trust me on this you will pay far more for your house and kids than you will ever save in taxes.

The best thing you can do is contribute as much as you can to a 401k.

 

[Jabberwocky12]

Exactly what I was going to say. Trust me there is not much you can do except pay your taxes. Sure a house and kids will give you a deduction but trust me on this you will pay far more for your house and kids than you will ever save in taxes.

The best thing you can do is contribute as much as you can to a 401k.

And when the chips are down and you want to be the absolute frugal king, use an FSA as well! Yeah there are limits but there are for other things as well. Just get sick and bingo! You're in the money!

/sarcasm

 

[PharmD RPh]

You only get a deduction for the part that exceeds 2% of your Adjusted Gross Income? i.e. >$2,000?

That should be correct, which I never exceed. Stupid government. Still ticked off about not being able to claim student loan interest. It shouldn't matter how much you make. If you went to college for 7 years and obtained debt from it so you could stay off government assistance and you pay a lot in taxes (as much as a single family average annual income here) I think they should allow the deduction. 😡

Then they decide to hold schedule A form out til mid February is a joke too. They're just hanging on to all those refunds earning interest.

 

[Old Timer]

That should be correct, which I never exceed. Stupid government. Still ticked off about not being able to claim student loan interest. It shouldn't matter how much you make. If you went to college for 7 years and obtained debt from it so you could stay off government assistance and you pay a lot in taxes (as much as a single family average annual income here) I think they should allow the deduction. 😡

Then they decide to hold schedule A form out til mid February is a joke too. They're just hanging on to all those refunds earning interest.

Do yourself a a favor. Stick to pharmacy. Your knowledge of government is woeful.

 

[PharmD RPh]

Do yourself a a favor. Stick to pharmacy. Your knowledge of government is woeful.

actually I read quite a bit about it, but still haven't come to the realization in which it chooses to function.

 

[All4MyDaughter]

LOL!

 

[PharmD RPh]

LOL!

Old timer has fallen off the rocker

 

[All4MyDaughter]

Old timer has fallen off the rocker

You'll get used to him! Old Timer is always Old Timer!

 

[Old Timer]

Old timer has fallen off the rocker

You may have read something about government and the way it functions, but if you think the reason there is a delay in filing your taxes using schedule A is because the "Government" wants to hold on to your money a little longer so they can collect interest, you need to dial down whatever you have been reading and move to the non-fiction section....

 

[PharmD RPh]

You may have read something about government and the way it functions, but if you think the reason there is a delay in filing your taxes using schedule A is because the "Government" wants to hold on to your money a little longer so they can collect interest, you need to dial down whatever you have been reading and move to the non-fiction section....

I know they say due to last minute changes in legislation made by congress, blah blah blah.... I want my refund!

 

[Old Timer]

I know they say due to last minute changes in legislation made by congress, blah blah blah.... I want my refund!

First of all, you shouldn't be lending the government money for free. A little planning in your part and you can have the money all year long and get interest at the same time...

 

[PharmD RPh]

First of all, you shouldn't be lending the government money for free. A little planning in your part and you can have the money all year long and get interest at the same time...

I do the calc at irs.gov's withholding calculator and it tells me to claim 10 exemptions on my federal tax. That always seems alarmingly high to me, so I claimed 8 all last year and will still get about 3K back on federal and estimated 1K state. I try to make it as close to zero as possible but tend to err on the side of caution and would rather get a small refund than have to pay. Next year, I'll likely try to pin it down exactly in case we have any emergency legislation from congress that will delay schedule A forms until March. 🙄

 

[rph3664]

You only get a deduction for the part that exceeds 2% of your Adjusted Gross Income? i.e. >$2,000?

Nope, that's what my accountant told me. I itemize (I have to; you HAVE to file 1040 over a certain income level) and I had enough deductions to do it.

 

[PharmD RPh]

Nope, that's what my accountant told me. I itemize (I have to; you HAVE to file 1040 over a certain income level) and I had enough deductions to do it.

When you go thru turbotax it says them same thing... Must be at least 2% of gross income. Can I usually get a little creative with my deductions, but I don't think I can come up with about 3k in this category.

 

[Old Timer]

I do the calc at irs.gov's withholding calculator and it tells me to claim 10 exemptions on my federal tax. That always seems alarmingly high to me, so I claimed 8 all last year and will still get about 3K back on federal and estimated 1K state. I try to make it as close to zero as possible but tend to err on the side of caution and would rather get a small refund than have to pay. Next year, I'll likely try to pin it down exactly in case we have any emergency legislation from congress that will delay schedule A forms until March. 🙄

Look at your income when you file your taxes. Look at the total amount of tax you have to pay for the year. Divide that by the number of pay periods and then look up that number in the tax table to get your deductions.

And, I didn't fall off of my rocker. I know exactly what I am saying. I usually say things provocatively to get your attention....

 

[PharmD RPh]

Look at your income when you file your taxes. Look at the total amount of tax you have to pay for the year. Divide that by the number of pay periods and then look up that number in the tax table to get your deductions.

And, I didn't fall off of my rocker. I know exactly what I am saying. I usually say things provocatively to get your attention....

My tax situation is a little more complicated than that, but I will get it a little closer to zero next year. After working on my taxes tonight, I came across another interesting issue. I got a refund in 2010 from my state tax for about $1200. I now have to report this on the 2011 return and pay federal taxes on my state refund. How bad does that stink? Seems like double taxation. I spoke with a neighbor that's a CPA and she said just to up my exemptions this year to where I don't get a state return and that should take care of the problem.

 

[Old Timer]

My tax situation is a little more complicated than that, but I will get it a little closer to zero next year. After working on my taxes tonight, I came across another interesting issue. I got a refund in 2010 from my state tax for about $1200. I now have to report this on the 2011 return and pay federal taxes on my state refund. How bad does that stink? Seems like double taxation. I spoke with a neighbor that's a CPA and she said just to up my exemptions this year to where I don't get a state return and that should take care of the problem.

No, you deducted your State & Local taxes based on your W-2 and you paid less. So no it's not double taxation. And to your first point. It's never more complicated than that. Unless you have a special credit that will not repeat or a one time shot of income that will not repeat, my formula is correct. If you made 120K last year and you paid 15K in taxes and you get paid every week, you will need to withhold $288.46 per week. Look at the tax tables and find out how many deductions gets you $288.46. Unless your income increases dramatically or taxes change, that's as close as you get.