2007 TAX CHANGE information (pdf format)

Here are a few Tax Tips to get you started... If you need more help getting your taxes in order, call or visit Villard and Associates.

1) For those of you who are eligible for the Life Time Learning Education Credit, and you are in the 25% tax bracket, you may want to report the tuition paid in 2007 as a Tuition and fees deduction on line 34 of the Form 1040. You may receive a higher tax refund. You need to review to see which process will provide you with a larger refund on your taxes. Do not forget to deduct the tuition paid to a Wisconsin eligible educational institution on your Wisconsin tax return. This reduces the amount of your Wisconsin income.

2) For those of you whose standard deduction is greater than your itemized deductions, you will take the standard deduction on your federal return. You may want to do the work to fill out the itemized deduction form as you may be eligible to receive an itemized deduction credit on your State of Wisconsin return, even if you are not eligible to use the itemized for federal purposes. This reduces the amount of your Wisconsin tax liability.

3) When calculating your medical expenses, be sure to separate any premiums you have paid for Long Term Care Insurance. As you may know, medical expenses are subject to the 7.5% floor of your Adjusted Gross Income on your federal return. You may not be able to recognize any of your medical expenses on Schedule A of your return, But – the Long Term Care Insurance premiums are reported as a deduction of your Wisconsin Income on your Wisconsin Tax Return. Be sure to include these premiums as a deduction on your State return.

4) If you have dividend income from foreign sources, be sure to include the foreign taxes paid as a credit on line 51 of your 1040 return. You may need to fill out form 1116 to qualify for this credit.

5) You may be eligible to claim the Retirement Savings Contribution Credit. If you contribute to an IRA or an employer sponsored retirement plan, and you fall within the income limitation, check to see if you are eligible for the Retirement Savings Contribution Credit. This credit is in addition to the exclusion or deduction from gross income for making the elective deferrals and IRA contributions.