Archive for the 'Taxes' Category
February 17th, 2008 -- Posted in Taxes |
Today’s guest post is by the Internal Revenue Service. Every year there are changes to the tax code. This year is better than most with only a few changes from 2006. I really encourage everyone of low or moderate income to look into the Saver’s Credit. If you qualify the IRS will give you a tax credit of up to 50% of what you contribute to a retirement plan. This includes employer sponsored retirement plans such as 401ks and individual plans such as IRA’s. The Saver’s Credit can create some major tax savings while helping you to save for retirement. A little known secret is you can contribute to an IRA as late as April 15, 2008 and still take the deduction on your 2007 tax return!
Taxpayers should be aware of important changes to the tax law before they complete their 2007 federal income tax forms. Here are some changes that may affect your return.
- AMT Exemption Increased for One Year. For tax-year 2007, Congress raised the alternative minimum tax exemption to $66,250 for a married couple filing a joint return. The exemption rises to $33,125 for a married person filing separately and to $44,350 for singles and heads of household. While the vast majority of taxpayers can file as usual, about 13.5 million taxpayers who file any of five tax forms affected by recent tax law changes related to the AMT will have to wait until Feb. 11, 2008, to file their returns. IRS.gov has more information on this important subject, including downloadable copies of affected forms and questions and answers.
- Extender Tax Breaks Reappear on IRS Forms. Several popular tax breaks, renewed too late to be included on 2006 forms, once again appear as separate items on various 2007 IRS forms. As a result, unlike last year, eligible taxpayers will no longer have to follow special instructions in order to claim the deduction for state and local sales taxes, the educator expense deduction and the tuition and fees deduction.
- Saver’s Credit. This year for the first time income limits for the saver’s credit are adjusted for inflation. The saver’s credit supplements other tax benefits available to low- and- moderate income taxpayers who save for retirement. Begun in 2002 as a temporary provision, the saver’s credit is now a permanent part of the tax code. Use Form 8880 to claim the credit.
- Mortgage Insurance Premiums May be Deductible. Some borrowers may be able to deduct mortgage insurance premiums paid on mortgages taken out or refinanced during 2007. The deduction for mortgage insurance premiums is phased out for taxpayers with adjusted gross incomes exceeding $100,000 ($50,000, if married filing separately). Claim this deduction on Schedule A, Line 13. Further details are in Publication 936.
- New Rules for Giving to Charity. To deduct any charitable donation of money, taxpayers must have a bank record or a written communication from the recipient showing the name of the organization and the date and amount of the contribution. Though taxpayers are already required to keep records to support their contribution deductions, this new provision is designed to provide greater certainty, both to taxpayers and the government, in determining what may be deducted as a charitable contribution. See Publication 526.
More information about the changes can be found on IRS.gov and in various IRS documents, including the Instructions for Form 1040.
Remember that for the genuine IRS Web site be sure to use .gov. Don’t be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.
Links:
February 8th, 2008 -- Posted in Reviews, Taxes |
I love being in business for myself. One of my favorite aspects of being self-employed is that business travel is deductible from my business income. As long as the primary purpose of the travel is business, with a few exceptions, all my travel expenses are deductible. I have visited many US destinations on business, next, I need to find clients in other parts of the world so I can travel there! Is there anyone in Spain who needs a U.S. tax return prepared?
The rules for business travel are fairly simple. If the primary purpose of your trip is business, you can deduct all your expenses to get to your destination, and all your food, lodging, and incidental expenses related to the business purpose of the trip. So for example, if I go to San Diego for a tax seminar and spend 4 days in the seminar, and 2 days visiting friends, then my airfare is 100% deductible, as well as my lodging and food while I was attending the seminar.
It is important to understand that “Primary Purpose” is determined by how much time you actually spent on each activity, not your main reason for taking the trip. So if I had spent 4 days visiting with friends, and 2 days in seminar, then the primary purpose of my trip was visiting friends, and my airfare and other transportation costs are not deductible. I can still deduct lodging and meals for the 2 seminar days and other direct seminar expenses. For travel within the United States, transportation costs are all or nothing. In the example above, I spent 1/3 of my time on business, but I cannot deduct 1/3 of my transportation costs.
For travel outside the United States, the rules are a little different. When traveling for business outside of the United States, if the primary purpose of your trip is business, you can still deduct all your business related lodging food and incidental expenses, but you have some non-business days, then you MUST prorate your transportation costs and the non-business percentage is not deductible. And just like for domestic travel, if the primary purpose of your trip is not business, then none of your transportation cost are deductible. The good news is, for business travel purposes, travel days, certain weekends, and some holidays are counted as business days, even if you are not attending a business event on those days.
Now back to my travel to Spain. When I find my perfect client in Spain, I am going to want nice lodging at an affordable price. While searching the internet I found a site for Holidays in Spain. There I found that Granada, in the south of Spain, is one of the best tourist destinations. In Granada you can find the Alhambra, a Moorish Citadal and palace. Seville, is the artistic, cultural, and financial capital of Southern Spain. In Seville you can find City’s Cathedral which is one of the largest of all Medieval and Gothic cathedrals. And in Malaga you can find Gibralfaro castle which provides stunning views of the city.  I think it might be nice to attend a tax seminar in a nice Spanish Castle!
Resources:
Seville Hotels  Granada Hotels  Malaga Hotels
As always, this article is intended as just general information and may not apply to your particular tax situation. Please consult with a tax professional (preferably an Enrolled Agent) about your particular tax situation.
January 25th, 2008 -- Posted in Taxes |
If you are going to do your taxes yourself, (and I can think of a lot of reasons why you should not!) why pay for tax preparation software? There are a number of online sites that will allow you to prepare and efile your federal tax return for free…if you meet certain criteria.
Side note:If you don’t qualify for free tax preparation, and you don’t want to pay me to do your taxes, at least click on the link below to receive both Turbo Tax and Quicken for as little as $30! This offer is good until April 15.
Buy Quicken and TurboTax Bundle & Save up to $25 + Free Shipping!
Now back to doing it for free.
If your gross income for 2007 is under $54,000, you may qualify to have your taxes filed for free with a number of different online tax preparation websites. If you need a state tax return done, most of the sites will include state tax preparation for a small fee. All sites include free e-file.
I will highlight a few of them here, but you can see the whole list at the IRS website. It is important to note, I am not providing links to the companies, because to get the best free file deal you need to access them through the IRS website. Going directly to the company website may cost you money!
A few of the big name companies are there, including Turbo Tax, Liberty Tax Service, and H&R Block’s Tax Cut. Names familiar to professional tax preparers include Tax Act and Tax Slayer, and FileYourTaxes.com.
In addition to free filing of your federal return, Liberty Tax Service offers state return filing for $9.95 each. If you don’t qualify for the free file, the federal return is also just $9.95
Turbo Tax is a little more restrictive, with free Federal Tax Preparation for only those with incomes below $30,000 or Active Duty military. They do offer free state filing for some states. If your state is one they don’t do for free, the cost is $9.95. They have a variety of options for those that don’t qualify for free filing starting at $14.95.
The H&R Block free tax site offers interview only service. To include a state return is $29.95.
In some of the lesser known companies there are some good deals. Online taxes has state returns for just $7.95. If you don’t qualify for the free file Federal taxes are also just $7.95. They also offer free telephone support.
Tax$imple is also a good deal with $7.95 state returns and if you don’t qualify for the free file the federal return is just $9.95.
Why are companies offering free filing? In addition to being listed on the IRS website, they are hopeing to sell you “value added services”. Often the free filing versions are very stripped down models of their paid filing products. They hope that once they get you started on your tax return you might decide to pay for some extra services.
Research the companies carefully to choose the firm that is best for you. Note that some companies may have slowdowns during high traffic times, particularly in early February and April. Don’t wait until the last minute to file your return. Chances are good that all these sites will have heavy loads on April 15. You don’t want to be in the middle of preparing your taxes when their servers go down! Make sure to make a copy of your tax return, and keep a backup on your computer.
Would you like to have your tax returns double checked? If you prepared your returns yourself, or even if you had them prepared for you, get a second opinion. I will review your tax return for errors, and offer tax saving advice for future returns starting at just $29.95. Your information is completely confidential and will never be used for any purpose other than the services you have requested. For tax return review just email your contact information and your tax return as a PDF attachment to: taxreview@mycfoonthego.com . I will get back to you with an exact price for review plus information on how to send payment within 2 business days. Satisfaction guaranteed. For more information on Kathleen please click the About Kathleen tab at the top of the page.
January 16th, 2008 -- Posted in Off Topic, Taxes |
I’ve just recently become involved with Entrecard. Entrecard is a networking site for bloggers that involves “dropping” your card on websites and having cards dropped on yours. Sort of like the calling cards of old. I have found Entrecard to be a great marketing tool and it has already brought tons of traffic to my site.
Thanks to Entrecard I have also found plenty of interesting sites that I might never have found otherwise! I’ll be featuring some of them in another post, in my newly added Off-topic category!
Now on to taxes. At Entrecard you earn “credits” (some are now calling them entrecredits) by dropping your card on sites, and by selling ads on your site. You can then use those credits to buy ads on other sites. Simple enough so far. But a whole economy is springing up where people are buying and selling other goods and services using entrecredits. Today people are selling advertising, web consulting, and even cookie recipes using entrecredits. That brings up an interesting question, are these taxable events? Do the sellers need to report taxable income when all they have received are entrecredits? The answer is a surprising probably! continue reading »
January 7th, 2008 -- Posted in Taxes |
Earlier is better when it comes to working on your taxes. Taxpayers are encouraged to get a head start on tax preparation, especially since early filers avoid the last minute rush and get their refunds sooner.
Here are seven easy ways to get a good jump on your taxes long before the April deadline is here:
1. Gather your records in advance. Make sure you have all the records you need, including W-2s and 1099s. Don’t forget to save a copy for your files.
continue reading »
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