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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!

Jan
04

Don’t Miss These Tax Deductions

Posted by mir

I don’t know a whole lot about doing taxes but I do know that deductions are good things that help you get more money back.  You hear about rich people writing off their trips or new laptops for business purposes, but what about us regular people?  I found a few deductions regular people like me can take advantage of.  The first is out-of-pocket charitable contributions.  Many of us keep track of big things we donate, but what about the little things like ingredients you buy for a nonprofit bake sale?  Maybe you purchased stamps for a school fundraiser.  Both things are totally tax deductible.  You can also deduct $.14 a mile for any driving you did for a charity or nonprofit organization. If your total contributions are more than $250, you will need the charity to acknowledge the validity of the expenses.

I you are one of the many looking for a job right now, you can deduct some miscellaneous expenses you incur while job hunting.  You can’t get these deductions if you are looking for your first job, and you can’t go over 2% of your adjusted gross income.  That being said, you can deduct things like lodging, food and transportation if you are required to be away from home overnight.  You can also deduct cab or taxi fares and fees you pay at employment agencies.  Last but not least, you can deduct what you pay for printing resumes or any other paper product you need in applying for jobs.

If you are just at the beginning of your career, you can deduct the expenses of moving to take your first job.  This job needs to be a minimum of 50 miles away from your current residence.  If this is true, you can deduct the cost moving you and all your possessions to the new location and even get 16 1/2 cents for each mile you drove your own car for the move in 2010.

In an effort to save money, some of us have started to make changes to our homes to make them run more efficiently.  You can get a tax credit for 30% of the cost of the improvements you do up to $1,500.  If you already claimed the full $1,500 in 2009, you can’t claim it again in 2010.  This credit works for windows and outside doors, high efficiency furnaces, air conditioners, water heaters, and stoves that use biomass fuel.  If you installed alternative energy equipment at your residence, there is no dollar limit you can apply the 30% to, and you can even include the cost of labor.  Just one more way going green can help you save green as well!

Nov
18

When Do You Need Your Taxes Done Professionally?

Posted by Administrator

The majority of people who file taxes each year can probably figure them out without too much difficulty. It takes some organization, basic math skills and patience, but it can be done. If you have the help of some tax preparation software, it can be made even simpler. However, if you are the nervous type of person, you might be asking yourself if you need to have a tax professional (usually a CPA) take a look at what you’ve done, just to ‘make sure.’  Unless you are related to an accountant, that’s going to cost you some cash.  In order to help you determine this question, the following is a list of situations in which you should ALWAYS have a qualified tax professional either do your taxes for you, or, at the very least, go over your final return before you file.

  • If your income exceeds 60-70,000 dollars a year, it’s a good idea to have a tax professional look at it to see if they can save you some money.  If you are making less than this, your taxes are already comparatively low, and the margin of additional savings you might get is fairly low.
  • If you run your own business, you should always, always, have your taxes done professionally.  Even if your not making money in your business yet, or currently. Even if you fall below the 60-70K guideline, business owners fall into a whole bunch of additional laws and loopholes. To make matters even more complicated, every state has tons of different rules and regulations that have to be followed and authorizations that have to be gained. You want to make sure you are doing this correctly from the get go, not only can it save you money, it can save you from jail-time.
  • If you are self-employed, there are lots of tax laws and tax breaks that could apply to your individual situation.  If you are self-employed and making most of your living that way, having a professional tax preparer on board can really save you money.
  • If you are in a divorce or anticipate divorce proceedings, it is essential to have your finances and taxes spic and span.  You need to have everything documented, ESPECIALLY if the divorce is not amicable.  Even if it is a ‘friendly’ divorce, having things documented and done correctly will simplify the proceedings. Every divorce is going to cost you money, and the more money you have, the more it’s likely to cost you. Having a tax professional on board is a good idea when dealing with all of the various legalities attendant upon a divorce.
  • If a spouse or parent dies and you are dealing with legal issues of their passing, especially when substantial amounts of inherited money (usually anything in excess of $25,000) are involved.
  • If you have an expensive hobby that takes a lot of time and money, (yachting, scuba diving, mountain climbing etc) a certified tax professional can advise you in ways to make that hobby as tax-friendly as possible, ultimately saving you dollars off of your bottom line tax amount
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?!