Give boomer clients a (tax) break

Writing on SmartMoney.com, Bill Bischoff points out six tax breaks to help high-income clients limit their tax bill this year.

1. Take advantage of SEPs. Over 8 percent of younger boomers are self-employed, while 10.5 percent of older boomers are, according to the Bureau of Labor Statistics. Self-employed boomers may be able to deduct up to $46,000 for 2008.
2. If your clients paid too much to Social Security last year, they can claim some of it back. The credit will be for the amount clients contributed beyond $6,324, which represents their half of the 12.4 percent Social Security tax based on a maximum salary of $97,500, Bischoff writes.
3. Divorced clients may be able to deduct alimony payments, depending on the terms of the divorce.
4. Unlucky clients can deduct gambling losses up to the amount they’ve won during the year.
5. Write off investment interest. “The deduction for the interest paid to carry taxable investments (…) is unaffected by the phase-out rules that apply to most other itemized deductions listed on Schedule A,” Bischoff writes. The only catch? The deduction can’t exceed taxable income from interest, annuities, royalties and short-term capital gains.
6. Take advantage of the dependent care credit. High-income clients with kids under 13 can take a credit of 20 percent of child care expenses, up to $600 for one child and $1,200 for two or more.