10 tax deductions that are oft overlooked
February 17, 2010 by Taxcut Editor
Filed under Personal and Business Taxes
Because you deserve a bigger tax refund
Regardless if your tax returns are usually easy, or if you have to learn calculus to get through them, there are tricks and tips for everyone to make things better. You won’t need online loans to get them, and you won’t need to get tax refund loans either. You’d be much better clicking that link and applying for online loans.
Here are the top 10 overlooked tax deductions
Thanks to a recent WalletPop article, everyday consumers like you and me can get a bigger tax refund. Here are the highlights from a fine piece by Ken and Daria Dolan that I’d recommend you check out. Just remember that I’m not a professional tax adviser. Any questions should be directed at a certified tax professional.
- Keep an eye on mileage – The IRS says taxpayers can deduct miles “primarily for, and essential to” medical care at 24 cents per mile. People who need to travel for regular treatments can benefit greatly. You can also deduct for miles driven for charity work at 14 cents per mile.
- Property taxes don’t need to be itemized – According to the Dolans, a 2008 law lets you up your standard deduction by the amount of property tax you pay ($ 500 max, or $ 1,000 on a joint return).
- New car excise tax – Did you buy a car between February 17 and December 31, 2009? According to the Dolans, “you can deduct the sales and excise taxes that you paid up to a maximum purchase price of $ 49,500.” It doesn’t have to be itemized!
- Springing forward? Fall back! – If you filed state income tax in the Spring because you owed money in 2008, you can still count it towards your 2009 state return.
- Green credits – Yes, I mean going green. Heating and cooling products – as well as other energy-saving home improvements – can save you green. Saving 30 percent on up to $ 1,500 worth of improvements is worth your time!
- Sold a home in 2009? – Deductions for sale and closing costs, Real Estate agent commissions and other legal fees are available.
- PMI deductions – New laws now make private mortgage insurance payments deductible, but only through your 2010 return. Check this out with a tax professional before it’s gone!
- Investors, take heed – Investment-related expenses like investment publications, financial advisor fees, mileage to go see a broker and more are available for deduction. In a similar vein, certain tax preparation expenses are deductible.
- Unemployed in 2009? – The American Recovery and Reinvestment Act “made the first $ 2,400 you receive in unemployment benefits tax free,” write the Dolans. Expenses incurred searching for a job are deductible if you searched for a job in the same sector. This can mean ads, agency fees, postage, travel, phone calls, and so on. If it all amounts to more than two percent of your adjusted gross, it’s fair game, say the Dolans.
- Childcare expenses – This credit includes daycare, nannies and more. The credit is up to $ 3,000 for one child, and up to $ 6,000 for two or more. The deduction stops applying at 13 years of age.
Remember – CONSULT WITH YOUR TAX PROFESSIONAL if you have questions!
Oh, and avoid tax refund loans in favor of online loans. That’s about it.
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A Short Timeline of Taxation of the USA, Part One
December 25, 2009 by Taxcut Editor
Filed under Personal and Business Taxes
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
Between 1868 to 1913, almost 90% of the federal government’s revenue was gotten from tax on alcohol and tobacco. While the Civil War was occurring there was a brief income tax, but it wasn’t until 1913 that the 16th Amendment permitted Congress to tax incomes “from whatever sources attained.” The initial 1040’s were due on March 1, 1914. There was not any money taken from paychecks and no money was sent in with the return. Every taxpayer’s taxes were calculated by IRS field agents and a bill mailed to the taxpayer on the first of June.
1766 – Colony leaders met to extinguish British taxes in place by the Stamp Act. The Stamp Act Congress, as it was called, was the start of the American independence movement and the beginning of the modern U.S.
1782 – The first Congress under the Articles of Confederation formed. This Congress had no taxing powers.
1789 – America granted a newly formed Congress the ability to tax. Without taxing powers, the first Congress of the United States barely survived 7 years prior to being dubbed a failed attempt; the second Congress, with taxing powers, is currently going strong after almost 300 years. If you are feeling the pressure with today’s taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!
1792 – Alexander Hamilton coerces Congress to pass an excise tax on whiskey to increase earned income for the government and steady the increase in alcohol consumption. In the western frontier alcohol was the basic medium of exchange, and the 25% tax was harsh. By 1794 the area was in open rebellion. The father of the IRS was created to give the tax enforcement. Go here if you want help from a modern-day CPA firm in Raleigh, NC.
1832 – The national debt that remained after the Revolutionary War and the War of 1812 is paid off. The South doesn’t see any reason for continued high import taxes that raise prices for Southern consumers and promote industrial monopolies in the North.
1850 – John C. Calhoun of South Carolina tells Congress that the South could leave the Union due to the fact that the overly oppressive taxation in the South increased funds that ended up in the North, creating a great shift in wealth from the South to the North.
Stay tuned for Parts 2 and 3 of the Timeline of US Tax Policy!
http://www.marccpa.com/
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A Short Timeline of Tax Practices of the USA, Part One
December 21, 2009 by Taxcut Editor
Filed under Personal and Business Taxes
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
From 1868 to 1913, about 90% of the national government’s revenue was gotten from taxes on alcohol and tobacco. While the Civil War was going on there was a brief income tax, but it was not until 1913 when the 16th Amendment permitted Congress to tax incomes “from whatever sources attained.” The initial 1040’s were due on March 1, 1914. No money was taken from paychecks and none was sent away with the return. Each taxpayer’s taxes were checked by IRS field agents and a bill mailed to the taxpayer on the first of June.
1766 – Colony leaders met to protest British taxes in place by the Stamp Act. This Stamp Act Congress, as it was named, was the beginning of the American independence movement and the origin of the modern U.S.
1782 – The first Congress under the Articles of Confederation formed. This Congress didn’t have any ability to tax the people.
1789 – Americans gave a new Congress taxing powers. Without taxing powers, the first Congress of the United States scantly survived 7 years before being declared a failure; the 2nd Congress, with taxing powers, is still functioning after almost 300 years. If you are feeling the pressure with today’s taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!
1792 – Alexander Hamilton coerces Congress to pass an excise tax on whiskey to increase earned income for the government and steady the increase in alcohol consumption. In the western frontier whiskey was the basic mode of exchange, and the twenty-five percent tax was a bit difficult to deal with. By 1794 the area was in open revolt. The forerunner of the Internal Revenue Service was created to enforce the tax. Go here if you want help from a modern-day CPA firm in Raleigh, NC.
1832 – The national debt that remained after the Revolutionary War and the War of 1812 is finally accounted for and paid. The South doesn’t see any reason to continue high import taxes that raise prices for Southern consumers and promote industrial monopolies in the North.
1850 – John C. Calhoun of South Carolina warns Congress that the South could leave the Union due to the fact that the overly oppressive taxing of the South increased funds that ended up in the North, causing a great shift in wealth from the South to the North.
Stay tuned for Parts 2 and 3 of the Timeline of US Tax Policy!
http://www.marccpa.com/
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Tax tips for new businesses
July 13, 2009 by Taxcut Editor
Filed under IRS News Items
Anyone starting a new business this summer should be aware of their federal tax responsibilities. Here are the top seven things the IRS wants you to know if you plan on opening a new business this year.
First, you must decide what type of business entity you are going to establish. The type your business takes will determine which tax form you have to file. The most common types of business are the sole proprietorship, partnership, corporation and S corporation.
The type of business you operate determines what taxes you must pay and how you pay them. The four general types of business taxes are income tax, self-employment tax, employment tax and excise tax.
An Employer Identification Number is used to identify a business entity. Generally, businesses need an EIN. Visit IRS.gov for more information about whether you will need an EIN. You can also apply for an EIN online at IRS.gov.
Good records will help you ensure successful operation of your new business. You may choose any recordkeeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal tax purposes.
Every business taxpayer must figure taxable income on an annual accounting period called a tax year. The calendar year and the fiscal year are the most common tax years used.
Each taxpayer must also use a consistent accounting method, which is a set of rules for determining when to report income and expenses. The most commonly used accounting methods are the cash method and an accrual method. Under the cash method, you generally report income in the tax year you receive it and deduct expenses in the tax year you pay them. Under an accrual method, you generally report income in the tax year you earn it and deduct expenses in the tax year you incur them.
Visit the Business section of IRS.gov for resources to assist entrepreneurs with starting and operating a new business.
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Annual filing for most Forms 2290 / Heavy Highway Vehicle Use Tax Return
June 25, 2009 by Taxcut Editor
Filed under IRS News Items
The annual filing season for most Forms 2290, Heavy Highway Vehicle Use Tax Return, is approaching and the IRS reminds taxpayers that electronic filing is now required for individuals and organizations reporting 25 or more taxable highway vehicles.
Form 2290 is used to report and pay the highway use taxes that pay for America’s roads and interstate highways. Last year truckers and others paid more than $1 billion in federal highway use taxes.
For most Form 2290 filers the due date for tax period July 1, 2009, through June 30, 2010, is August 31, 2009. For vehicles placed in service after July 31, 2009, Form 2290 and Schedule 1 must be filed, and the tax paid, by the last day of the month after the month the vehicle is first used in the tax period. For example, if a taxpayer begins using a taxable highway vehicle in September 2009, the due date for filing Form 2290 and paying the tax is October 31, 2009.
Although filing Form 2290 electronically is not required for taxpayers reporting fewer than 25 vehicles all taxpayers are encouraged to file their forms electronically.
“Taxpayers should take advantage of the benefits of filing Form 2290 electronically,” IRS Excise Tax Program Director Ricky Stiff said. “This really isn’t new. Most taxpayers file and pay their personal federal income taxes using a computer and this is no different. The best part of 2290 e-file is that taxpayers will receive their Schedule 1 almost immediately.
“There is no more waiting for Schedule 1 to come in the mail and truckers can then register their vehicles right away.” Most states require a stamped Schedule 1 before a trucker can register their vehicle and obtain proper license tags.
E-filing Form 2290 will also reduce errors that can occur with paper filing which means less correspondence with the IRS.
To file electronically, taxpayers need to select an approved software provider for Form 2290. Their names and contact information are available on IRS.gov, — just type “2290 e-file” in the keyword search box in the upper right hand corner. More Form 2290 information, including frequently asked questions, is available on the IRS Web site.
In addition to Form 2290, excise Forms 720, Quarterly Federal Excise Tax Return, and 8849, Claim for Refund of Excise Taxes (Schedules 3 and 6), may also be e-filed.
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