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Haiti Donations in Early 2010 OK For Claiming On 2009 Returns

Posted by Administrator on Feb-1-2010

The IRS announced a new tax relief for people who contributed to providing earthquake relief in Haiti. It allows contributors to get the tax advantage of the donation for their 2009 claim rather than waiting a year for the benefit.

According to the irs.gov website, only cash contributions made after January 11, 2010 and before March 1, 2010 will qualify. All cash donations made after March 1, 2010 will only be eligible to be claimed for the 2010 tax year.

To gain the benefit, you must itemize your tax deductions using Schedule A. For more information, please visit the IRS website at irs.gov.

Archive for October, 2010

Oct
27

Tax Deductions You Don’t Know About

Posted by mir

Most of us know the regular tax deductions we can submit every year, but there are a handful of deductions most people don’t know about.  I want to share a few of these strange and unusual tax deductions with you.  Did you know you can deduct the cost of moving your pet to a new home?  Apparently your pet is considered a personal affect and you can write off the cost of transportation to Uncle Sam.

One that I found kind of gross is being able to write off the use of body oil.  Apparently, this only works if you can prove you’re a professional body builder.  On that note, one lady was able to deduct the cost of her breast augmentation  because it was considered a “stage prop essential to her act.”  As you might guess, this lady was a stripper and apparently it helped her get better tips.

One that I thought was actually good was the ability for a mother to deduct the cost of a babysitter when she’s doing volunteer work for a charity.  It might not be a crazy girls’ night out, but at least the government will pick up some of the tab.  Last but not least, if you own a junkyard and have a problem with rodents or snakes, you can deduct the cost of cat food to attract cats to help with your vermin problem.  Who knew?!

Oct
20

2010 Tax Bracket Breakdown

Posted by Administrator

Currently the United States uses a graduated income tax method, which, in its simplest terms, means that the more money you make the greater percent of it you will pay in taxes. It’s always a good idea to be aware of which tax bracket you fall into based on your income.  (And it’s also kind of a fun thing to know about those pesky neighbors the Jones.’)

For those couples who are married filing jointly, it can be very important to consider before deciding if both spouses will work full time.  If the difference in added income moves you to a higher tax bracket, once you combine it with child care costs etc, the second income can be entirely consumed by exterior and unanticipated costs.  So, for those who need to know, and those who just like to know, the following is the breakdown for how much of your income will be due as taxes, as of 2010.

Tax Rate Single Filers Married Filing Jointly Married Filing Separately Head of Household
10 % Up to 8,375 Up to 16,750 Up to 8,375 Up to  11,950
15 % 8, 376 – 34,000 16,751 – 68,000 8, 376 – 34,000 11,951- 45,550
25 % 34,001 – 82,400 68,001- 137,300 34,001 – 68,650 45,551 – 117,650
28 % 82, 401 – 171,850 137,301 – 209,250 68,651 – 104,625 117,651 – 190,550
33 % 171,851 – 373,650 209,251 – 373, 650 104,626- 186,825 190,551 – 373,650
35 % 373,651 or More 373,651 or More 186,826 or More 373,651 or More
Oct
07

Tax Breaks for Caregivers

Posted by bry

Do you know someone who is taking care of an aging parent?  As the baby-boomer generation reaches the elder years, more and more are transitioning from being income earners to being dependents.  Many of them are taken care of by their children or grandchildren.  This can put a huge strain on the children/grandchildren, both emotionally and financially.

There is some hope for caregivers.  There are some provisions in the tax code for such circumstances.  Perhaps the most commonly recognized is the federal income tax dependent exemption.

The purpose of an exemption is to reduce your taxable income.  This exemption can be taken for yourself and for your spouse if you are married.  This particular exemption can be worth as much as $3,650.

The cost of giving full-time care to a loved one can easily become burdensome.  Take advantage of every exemption available if you are a caregiver.

Oct
02

Filing Taxes the Year of a Divorce

Posted by mir

Divorce Tax Tips

Taxes are bad enough, and so is going through a divorce, but put the two together and you’ve got a huge mess.  If you are currently facing these two issues, here are a few hints that might help along the way.

  1. First and foremost, the day your divorce is finalized is very important.  If your divorce is finalized by no later than December 31 of that year, the IRS will consider you unmarried for the entire year.  Knowing this may help you plan the best day for your divorce finalization.
  2. If you were not yet divorced in the year you’re filing for, you can still file jointly.  You and your partner should probably decide if it’s best to file as “married,” “married filing separately,” or “married filing jointly.” You can run the numbers to see which one would give you both the best return.
  3. Be aware that taxes play a large role in how your property is distributed. The IRS decides how property distribution, child support and alimony are reported.
  4. Alimony is considered taxable income for the recipient and it is tax-deductible for the giver.  Child support, however, is not taxable income for the recipient and it is not tax-deductible for the giver.
  5. The IRS assumes that the parent with custody of the children is allowed to claim exemptions for those children.  However, spouses can trade them back and forth if desired using IRS Form 8332.
  6. Before you do anything, seek out professional help to make sure you don’t get burned.