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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.
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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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