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Money for nothing

It’s tax time; keep what’s yours and make it grow


If your finances are uncomplicated by wealth, you shouldn’t have to spend weeks dissecting dollars and cents.

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When I wrote about money right here in 2019, a reader commented, “The worst thing we can do is serve the public our entire career, juggle injuries and illnesses, work exhausting hours and then, if we’re lucky enough to retire, not have the financial security to enjoy our retirement.”

I can relate, MoValReaper6, but tax season is a great time to review laws, loopholes, programs, policies, benefits and investments that can help you meet your post-EMS goals. Books have been written on those topics. Some, like J.K. Lasser’s “Your Income Tax,” are so detailed, they can turn a paramedic with an OCD streak into an amateur accountant. Others, like “Get What’s Yours,” by Phillip Moeller et al., are more philosophical. Set aside some time and try either if you dislike depending on others for asset management.

If your finances are uncomplicated by wealth, you shouldn’t have to spend weeks dissecting dollars and cents. Still, it wouldn’t hurt to know a few basics.

2020 federal tax returns

  • Filing status. Being single has advantages, but not at tax time. You’ll likely owe less if you meet the criteria for Head of Household. Many single caregivers do. And married couples with one primary wage earner almost always do better by filing jointly instead of separately.
  • Dividends and capital gains. Most dividends paid by corporations to stockholders qualify for the same lower taxes as long-term capital gains. That income is clearly marked qualified on your 1099-DIV forms. As for capital gains, you can save 10% or more by holding onto those assets for at least a year. See the Qualified Dividends and Capital Gains worksheet in the Form 1040 instructions.
  • Tax deductions. What’s it going to be, itemized or standard? That used to be an important decision for many of us. Now that standard deductions are so much larger (24,800 for joint filers), it’s harder to come out ahead by itemizing. Hundreds of deductions – including most state and local taxes, mortgage interest, and unreimbursed employee expenses – were wiped out as part of the 2017 tax cut. The good news is, recordkeeping is much simpler and you can still deduct up to $300 of charitable cash contributions without itemizing.
  • Tax credits. The most fun you’ll have doing taxes is finding credits you didn’t know you could take. Here are four fairly common ones to explore:
  • Child Tax Credit: Many of you will get back $2,000 per child under 17.
  • Earned Income Credit: This is similar in principle to the Child Tax Credit, but with different amounts and more restrictions.
  • Recovery Rebate Credit: If you didn’t get both 2020 economic stimulus payments, you can apply for them on your return.
  • Premium Tax Credit: Those who purchased health insurance through the Affordable Care Act (Obamacare) may be entitled to rebates on premiums. You’ll have to include Form 8962, one of the most confusing pieces of paper I’ve ever seen issued by the U.S. government.
  • E-filing. You’ll get your refund much faster by filing your return electronically. See if you qualify for free software here.

2021 finances

  • Explore non-deductible employee benefits. Here are some you may have overlooked:
  • Medical, dental, vision
  • Uniforms, dry cleaning, tools, equipment
  • Bonuses for recruiting others
  • Tuition reimbursement, childcare
  • Discounts on food, entertainment, travel, publications
  • Local tax breaks
  • Pay off credit cards. Banks often charge double-digit interest on unpaid credit-card balances while offering little or nothing to cash depositors. The solution? Borrow from yourself for free and save at least 10 cents on every dollar you would have owed.
  • Maximize 401K investments. This is especially true if your employer matches any part of your contributions. We’re talking free money, folks.
  • Minimize taxes withheld. There’s this perplexing notion that getting a big refund means you’ve aced the whole cash-management thing. Here’s a better idea: Submit a revised W-4 form to your employer so that less is withheld from each paycheck. The goal is to break even at tax time, not to float the government an interest-free loan.
  • Consider health insurance through Obamacare. That’s a dirty word in some circles, but for over 10 million Americans who don’t qualify for other subsidized insurance, the ACA marketplace is the best way to afford premiums.
  • Report business expenses to offset self-employed income. Do you have a side business – teaching or writing, perhaps? Many of your colleagues do. Proprietors are allowed to deduct almost all expenses related to the production of income. The payoff for keeping those records? Lower taxes.
  • Consider custodial and health savings accounts (HSAs). The former reduces taxes by accruing interest or dividends in the name of a minor. The latter allows tax-deductible funds to be set aside for medical expenses.
  • Budget. If you embrace only one idea from this article, let it be budgeting. Calculating income versus expenses isn’t only smart, it’s essential – unless you want to live life as a chronic debtor, never knowing how you’ll cover your nut. Start easy and small by tracking what you spend and comparing it monthly to what you make. If that sounds like a no-brainer, you’re already on the right track.

Just do what you can. You’ll have another chance in 2022.

Mike Rubin is a paramedic in Nashville, Tennessee. A former faculty member at Stony Brook University, Mike has logged 28 years in EMS after 18 in the corporate world as an engineer, manager and consultant. He created the EMS version of Trivial Pursuit and produced Down Time, a collection of rescue-oriented rock and pop tunes. Contact him at