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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.

Jan
13

Big Tax Savings for Business Owners!

Posted by Administrator

One of the lesser known tax law changes for 2011 has to deal with writing-off personal property in a business.  Most business expensing or write-offs are handled via section 179, but for the tax year of 2011 only, some fairly big changes have occurred that are handled outside of section 179, and don’t have the same eligibility requirements.

Essentially, any business owner is eligible to write off the entire value of personal property purchased for the business after September 8th, 2010.  The new law changes allow 100% bonus depreciation in the first year of purchase (rather than graduated depreciation over a period of five years).  For example, if you purchase a $2,000 computer for your business in Sept-Dec of 2010 or in 2011, you can deduct the entire $2,000 from your total taxable income. Depending on your tax bracket, this will result  savings of $200-700, just on that one computer. (See What Does it Mean to “Write Something Off”)

This fabulous windfall continues throughout 2011, so if you haven’t purchased property already, there is never going to be a better time than now to do so! If you are thinking about investing in property plant equipment and furniture and fixtures for your business, this news is for you!

Nov
02

Marital property and Non-Marital Property in Divorce

Posted by Administrator

Once divorce proceedings start, a lot of unfamiliar legal terms start getting thrown around.  One of the most important distinctions when dividing the finances between a divorcing couple is the difference between marital and non-marital property.

Marital Property is considered to be co-owned by both parties, and must be split between the two parties of the divorce.

Non–Marital Property is considered to be individually owned by a particular spouse, and remains wholly the property of that spouse after the divorce.

It is not uncommon for a lay person to make certain assumptions about what is and isn’t marital property that can actually be completely incorrect. Just because you owned the car or house before you were married, does not necessarily make it non-marital property.  A lot of factors can influence this determination, like the length of the marriage, and different state laws. For example, in a state with a community property law, as soon as you are married, everything you own becomes your spouse’s by 50 percent, with very few exceptions.

Essentially, the person who makes the final distinction between marital and non-marital property in a divorce is the judge. Which leads to the questions, how does the law make these distinctions? The answer is: a LOT of different ways-entire books are written about this. What is important for you to know is that you cannot assume that just because you bought the property before you were married, or you started the business before you were married, that it is considered non-marital property. You have to have a judge tell you if is marital or non-marital (If the couple can agree with their attorneys about what the case may be, this becomes a moot point).

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