Welcome to The Frugal Forum — a column for boomers interested in optimizing their return on limited resources. This column is an open forum for those wanting to contribute their money-saving ideas and for the rest of us who want to hear from them.
April 15 is fast approaching, and the message in this first issue will focus on keeping what is yours and not the IRS’s. Many boomers may still be planning to itemize deductions on their federal return when they may be able to get more of a deduction using the “standard deduction.” Did you know that the standard deduction for a married couple filing jointly in 2009 has risen to $11,400? OK, but, did you know about form 1040, Schedule L? This new schedule allows you to increase your standard deduction for property taxes and sales taxes on the purchase of new motor vehicles. (No, this has nothing to do with “clunkers.”) Married couples filing jointly may deduct an additional $1,000 for property taxes paid in 2009. They may also be able to add to the standard deduction the amount of sales taxes paid on the first $49,500 for the purchase of a new vehicle (that includes motorcycles and motor homes). If you were crazy enough to purchase your new vehicle in Chicago and pay the 10.25% sales tax, you could have up to $5,074 in additional deductions. If you have been keeping track here—married joint filers with a new vehicle in 2009 could have an enhanced standard deduction of up to $17,474. It’s not too late. Check with your tax advisor and keep what is yours. A penny not paid is a penny saved.
[Don Grady is a resident of Sun City, Huntley. He is currently the Executive Director of Academic Outreach at National-Louis University, Chicago.]
