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2005 Tax Tips

|January 31, 2005

2004 Update

Tsunami Relief Cash contributions made between Jan. 1-31, 2005, for the relief of victims in areas affected by the Dec. 26, 2004, Indian Ocean tsunami will be deductible for tax year 2004.

The following tax tips from Tuyet Le, UCSD's in-house financial planner, will help you get a jumpstart on your tax planning for the new year. The list contains information on deductions, dollar and age limits, program extensions and more.

1. You can contribute a maximum of $14,000 to your 403(b) tax-deferred or similar retirement savings account, up $1,000 from 2004. The maximum catch-up contribution for an individual age 50 or over is $4,000; therefore, individuals age 50 or over will be able to contribute a maximum of $18,000 for 2005.

At UCSD, you can double the above contribution amounts by also participating in the tax-deferred 457(b) retirement savings plan.

2. The Individual Retirement Account (IRA) contribution limit has increased to $4,000 in 2005, up $1,000 from last year. Individuals age 50 or over can contribute an additional $500 for a maximum of $4,500.

3. Donors of used cars can no longer deduct the car's full blue-book value. They can deduct what the charity netted for the sale of the car.

4. You can now deduct either your state sales tax or your state income tax on your federal return.

5. Teachers can once again deduct $250 for the purchase of classroom supplies. This deduction was scheduled to expire in 2004.

6. You will pay Social Security taxes on the first $90,000 of earnings in 2005, up from $87,900 in 2004.

7. The basic standard deduction for a married couple is $10,000 for 2005.

8. Take free financial planning classes through Staff Education and Development or sign up for an individual consultation with Tuyet Le, UCSD's in-house financial planner in the Benefits Office, Human Resources Department.

9. Consult your tax advisor for information tailored to your individual situation.

 

 


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