State Senator Jay Hottinger

An old English proverb says, "A fool and his money are soon parted." Unfortunately, the rest of us need only wait until tax time! Last year, Americans had to work just past tax day before we stopped working to pay the government and started working for ourselves. In fact, April 19, 2003, was deemed "Tax Freedom Day."

The good news is that taxpayers are afforded a number of opportunities to reduce their tax burden through a variety of tax credits and deductions outlined in your 2003 tax guides. I thought that as the W-2s start appearing in mailboxes, and as that April 15 deadline looms, I would take this opportunity to share with you some common tax credits and deductions on your state taxes, many of which, I've had the opportunity to support as a member of the Ohio General Assembly.

A tax incentive we passed a couple of years ago provides a $500 state tax credit for families who adopt. A tax credit, unlike a tax deduction, refers to amounts of money subtracted from the total amount of taxes you pay to a government entity. In this case, if a taxpayer adopts a child under the age of 18 and if the adoption occurs under Ohio's adoption laws or is recognized by the state, he or she may subtract $500 off of what they owe on their state taxes. The tax is nonrefundable, meaning if the family owes less than $500 they are not entitled to get money back; however, it provides a significant help to adoptive families trying to meet the ever-increasing cost of raising a child. Another popular tax credit that helps families with children is the childcare tax credit. Those taxpayers that are earning less than $40,000 and have child care expenses, may be entitled to claim a credit on their state taxes if they are eligible for the childcare credit on their federal taxes.

Unlike a tax credit, a tax deduction is subtracted not from what you pay, but from what you pay on - your gross income. And so it follows that if you are paying taxes on less income, you are paying less in taxes. In 1999, through the "Patient Protection Act," the General Assembly provided three such tax deductions to help families with the rising cost of health care.

Through this bill, taxpayers may deduct from their adjusted gross income amounts paid for both medical care insurance and long-term care insurance as long as the taxpayer is not eligible to participate in an employer-subsidized plan or Social Security health benefits through Medicare. Another deduction helps those families whose medical bills exceed their income by 7 1/2 percent for that tax year.

Recognizing the increasing expense of higher education, the Ohio General Assembly inserted a provision in the state budget of the 123rd General Assembly, which allows qualifying Ohio taxpayers to deduct up to $5,000 (per student) for the first two years of college to help with the cost of tuition paid to an Ohio university. This deduction benefits those families whose incomes do not exceed $100,000 on a joint return or $50,000 for a single filer.

Are you 65 years or older, married or have you contributed to a candidate for state office? These are also reasons to take a closer look at your tax guide and reduce your tax burden this year. You can pick up the 2003 tax booklet at your local library or post office. You may also contact the Ohio Department of Taxation at 1-800-282-1780, or visit their website at www.state.oh.us/tax/.

As always, please feel free to contact me by mail (State Senator Jay Hottinger, Ohio Senate, Statehouse, Columbus, OH 43215), by email (sd31@mailr.sen.state.oh.us) or by phone (614-466-5838).