Tax season may not be upon us just yet, but it’s never too soon to look into the tax deductions that may be available to you.  Many require you to have proof in paperwork, especially in the event of an audit, and if it’s not information that your employer can provide, it’s up to you to keep accurate records.  Here are some common tax deductions that you can start preparing for today.

• Interest on your mortgage. Let’s be honest–interest is pretty much all you’re paying for in the first few years of owning your home.  Of course, I doubt there’s even a chance you’d let this deduction slip by, so just consider it a friendly reminder and something to look forward to when preparing your taxes.
• Health insurance premiums and Health Savings Accounts (HSAs). This might not increase your tax return significantly, but it sure feels good to be able to deduct some of those expensive premiums we all have to pay for health care, particularly if you’re self-employed.  (Hint: if you are self-employed, you get to deduct more than the rest of us.)
• Student loan interest. That’s right.  Uncle Sam lets you deduct this one, too.  You should receive a statement from your bank come tax time to help you with this part, so be sure not to toss it aside or let it get lost!
• IRA contributions. This only applies to traditional IRAs.  You’re going to have to pay taxes on your withdrawals when you reach retirement age, so prior to that point in time, you get to deduct your contributions.  If you have a Roth, you don’t get to deduct, but you won’t have to pay any taxes on your withdrawals.
• Your home office. If you’re self-employed, don’t overlook this deduction.  However, do check into the specific restrictions to make sure you qualify.  For example, a room in your home that is purely used for your business counts as a home office.  Using the computer in the corner of your bedroom does not.  Once you’re certain you qualify, you can deduct not only the space itself, the mortgage/rent payment respective to it, electricity, etc., but you can also deduct your computer, business phone line, office supplies, etc.
• Charitable contributions. You probably already know this one, but did you know that it’s not just for monetary contributions anymore?  Did you donate some old clothes or used items to a place like Goodwill or your local church?  These can be deducted.  It’s best if you make sure to get some form of a receipt if possible.
• “Green” credit. If you recently renovated your home to be more energy-efficient and “green” or perhaps bought a qualifying fuel-saving, hybrid, or otherwise “green” car, the government will reward you with a tax deduction.

If you’re uncertain as to whether or not you qualify for these or any other deductions that you find, don’t be afraid to consult a tax advisor—you can deduct tax preparation services, too!  Home tax software such as TurboTax will help you catch deductions by asking you easy-to-follow questions.

Health care reform is a very heated topic right now—unless you’ve been asleep for the past few months, that’s no surprise to you.  I believe the problem is figuring out the truth.  We’ve all heard about the general ideas that are in the House and Senate versions of the proposed bill, but it seems almost impossible to get definitive answers out of anyone.

The initial spark for health care reform appears to be the number of uninsured people living in America.  However, while there’s no denying that many are in fact uninsured, the number itself is up for debate.  Lately, it’s been proclaimed that 45 or 46 million Americans are uninsured.  I’m no politician or statistician, but that seems pretty hefty even to me.

How Many Are Uninsured?

First, the most recent survey conducted by the Census Bureau reports that 9.7 of that 46 million are not American citizens—another source of debate that we’ll get to momentarily.  Also, there’s always a margin of error with every survey.  Some people answer the questions asked of them honestly, some may have reported being uninsured that ended up becoming insured sometime after the survey, and others may have outright lied.

According to spectator.org, Blue Cross Blue Shield estimated in 2003 that of the reported uninsured population, 14 million were actually eligible for some form of health care including Medicaid.  18.3 million were under 34.  17.6 million were earning over $50,000 annually and 9.1 million were earning over $75,000 annually.  This leaves a high probability that some of these people could likely afford health care but chose not to buy it, perhaps believing that because of the high cost, they would do without while still young, healthy, and theoretically not in need.

From this entire study, Blue Cross determined that 8.2 million people were uninsured because they truly could not afford it, yet they earned just enough that they did not qualify for government assistance.  Granted, this was 2003—but could the true number of uninsured people jump to 46 million in 6 years, even with a recession?

Abortion Issues

The debate also seems to include some moral issues such as abortion and coverage to illegal immigrants.  Regarding abortion, the House bill has been reported to state that the government health care would have to provide one plan that covers abortion and one that does not.  Politicians are saying that people with the plan will not be paying for others’ abortions, yet every time it has been proposed to have this in writing, that version has been rejected.  No matter my or your stance on abortion, the constant waffling is what I find to be the absolute most frustrating part.

Coverage for Illegal Immigrants?

There is also no solid stance on whether illegal immigrants would be able to take part in the government health care.  Ann Coulter writes on her website that in Section 246 of the 1000-page bill, one sentence is devoted to this issue: “Nothing in this subtitle shall allow federal payments for affordability credits on behalf of individuals who are not lawfully present in the United States.”  At the same time, there is nothing requiring doctors or other persons providing the actual health care to validate citizenship.  You also run into the problem of the emergency room, where federal law requires that patients in need of immediate attention cannot be denied treatment due to lack of insurance.  Could/should medical staff be required to check citizenship in this situation?

Is the Public Option Really An Option?

Then we have the problem of the health care reform being referred to as the “public option” that doesn’t sound officially optional.  Obama has insisted that if you like your private insurance and your doctor that you may keep them both.  But an issue arises if your insurance is provided through your employer.  Employers would be given incentives to offer the government plan to their employees instead of a private plan.  I don’t know what those incentives would be, but if your employer makes the switch, you may have no choice, especially when it would likely be more expensive to keep your private insurer by yourself.

There’s talk that the House version of the bill would mandate all individuals to purchase health care or pay a penalty of 2.5% of their gross income.  So you’ll pay money for absolutely nothing until you can afford to purchase health care?  If you’re already struggling, I’m not convinced this will help anyone.  Ann Coulter also mentions that if you’re not paying either, you can be cited for tax evasion and thrown in jail.  I sure hope that’s not true, but it also makes me wonder how each and every person will actually be tracked down.  And if you’ll really be thrown in jail alongside burglars and murderers who truly deserve to be there, that’s extra tax dollars being used to fund now-overcrowded prisons.  (Oh, and if you’re a small business owner, you’d also be penalized if you don’t offer insurance to your employees.)

I don’t propose to know everything about the health care reform or to fully understand it.  There is so much out there about this subject and so many extremely strong opinions in both directions.  Pepper in the unclear nature of the bill itself in its current form and it becomes harder to decipher the truth.  Would government-provided health care be a good idea?  Obama mentions stretching out Medicare benefits to everyone in a way, but Medicare already seems to be struggling with reports of wasted dollars and impending cuts.

I believe that something does need to be done about health insurance, but I’m not sure a full government takeover is the answer, especially not in the form that it’s currently being presented.  I do agree that the “pre-existing condition” clause needs to be done away with, and that is supposedly in the bill somehow—illnesses and current health situations are the main reason people need insurance in the first place.  Perhaps simply regulating the cost of health care would be a better idea than creating an entire government health plan.  Let’s level the playing field so that an MRI no longer costs $100 at one place and $3000 at another, and the patient knows what they’re paying or what portion they’re ultimately responsible for from the get-go.

Or we could all just be included on the health care plan that Washington politicians get.  Apparently it’s the best one out there…

It feels like we’ve been in a recession forever now, and we’re still not in the clear just yet.  So you’re still looking for ways to make your money last even longer—without having to live like it’s the Stone Ages.  Here are some tips to help relieve some of your financial worries.

• Make a budget.  You knew this one was coming.  This is the best way to really manage your expenses.  Start with how much money you have coming in every month, then list your expenses.  Include all of your bills, of course, but don’t forget to account for your morning latte, monthly magazine, and Friday dinner with friends every week.
• Avoid spending money on things you don’t really need.  When you make your budget, you’ll see where you can, or should, cut back.  Stick to it.
• Avoid being charged pointless fees.  Try not to use ATMs if possible.  Make sure your bank or credit card company isn’t charging you unnecessary fees.  If they are, insist that they be removed.
• Set up a savings account with direct deposit.  This will help you easily set aside some extra money.  It’s important to pay yourself first, even if it’s only a few dollars.  And if it never passes through your fingers, you’ll never miss it—you’ll just instinctively budget around it.  Whether you use the savings as an emergency fund or an entertainment fund is up to you and your personal priorities.
• Use coupons and look for deals.  Shop generic when possible.  Do some “research” before leaving the house to go grocery or clothes shopping to figure out who has the cheapest price and/or is offering the best deal.
• Pack your own lunch and bring your own snacks to work.  It’s not only that $8 a day you’ve been spending on eating out that adds up, it’s also those 2 trips to the vending machine every day that cost you $0.75 at a crack.
• Patronize your local library.  You can check out books, movies (yes, current ones), and even your favorite magazine that you gave up to save money, all for free.
• Find new uses for old or broken items.  Use that old t-shirt for a rag, turn an old bucket into a planter, etc.  Or, invest in repairing items instead of buying new ones.
• Rotate your tires and get your oil changes on a regular basis.  Preventative maintenance is important—it prevents future, major maintenance!  Your tires and your engine will last longer.

I believe that budget is the most important and most effective way to start making your money last longer.  Do remember that all the little ways of saving will add up, though.  And promise yourself to maintain your good money habits even when the recession has officially ended.