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Psyched over

Psyched over


Doing your own taxes is as much about psyching yourself up as actually completing your return. Financial adviser L. Patrick Le'Flore of PricewaterhouseCoopers offers the following tips.

Have a tax preparation checklist

It should include your personal information, income tax information (for example, W-2 forms, investment income statements, etc.), any adjustments (student loans, moving expenses), information on all household employees, any tax write-offs (such as mortgage payments), direct deposit and any foreign-bank account info, and any energy-saving purchases (for example, new kitchen appliances).

Consider itemizing your deductions

Home ownership, state and local taxes, charitable donations, out-of-pocket medical expenses, and miscellaneous expenses are all deductible. If they are greater than the standard deduction ($7,550 for heads of household for 2006 tax returns, $5,150 for single filers), you should itemize.

Work the system to your advantage

Although there are no federal marriage rights for gay couples, we can actually save more money than our married friends by thinking as a unit and not two single people. For instance, deductions for charitable contributions should come on the return of the partner who has the higher tax bracket, as should any assets or interest-earning stocks and bonds.

Make your partner a dependent

If one half of a cohabiting couple receives at least 50% of his or her total support from the other and made less income than the personal deduction of $3,300, that partner can be listed as a dependent on the other's tax return and claimed as an exemption to get a better tax break.

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