Archive for Taxes
Do you have to file a tax return?
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It’s that season of the year, that dreaded one following the holiday season… Tax Season. Every year about this time we begin to get lots of calls and emails from students, retirees, etc. all asking, “Do I need to file a tax return this year?”
Well, besides just income level there are plenty of reasons why you may need — or even want to — to file a tax return.
You must file a tax return if your income is above a certain level. The amount varies depending on filing status, age and the type of income you receive. Here are the general guidelines. Read More→
Updated tax deduction worksheets now available
Posted by: | CommentsWe’ve updated our tax deduction worksheets for the 2009 tax year. You can download these worksheets and use to help with your tax records. The worksheets are geared directly to a number of professions and business types. Click any one of the following links to download your own copy.
Airline Personnel- Auto Salespersons
- Auto, Travel & Entertainment Expenses
- Business Professionals
- Clergy
- Construction Workers
- Day Care Providers
- Direct Sellers
- Entertainers & Actors
- Firefighters
- Hairstylist & Manicurist
- Law Enforcement
- Long-Haul Truck Drivers
- Medical Professionals
- Real Estate Salespersons & Brokers
- Teachers & Educators
These worksheets are not all encompassing but represent the more common deductible expenses associated with the profession.
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Watch out for Haiti earthquake charity scams
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As we all look for ways to offer support for the earthquake victims in Haiti we must also be careful not to be scammed in our efforts to help. The FBI and other agencies are now warning that there are also those who are looking for opportunities set up scams surrounding the latest disaster relief efforts.
You should be highly skeptical of any unsolicited appeals you may receive or find on the Internet. Even if it appears legitimate, you should only contribute when you have made the call to the charity. If you are contributing via the Internet do not click on a link taking you to a charitable organization’s site, it could be a counterfeit site. Only contribute via the Internet if you yourself type in the Web address and go directly to the site. Even then, only contribute if it is a secure site. Make sure the Web address starts with “https” and not just “http.”
One month after Hurricane Katrina, the FBI said it was suspicious of most of the 4,600 Web sites soliciting money on behalf of those victims. Within an hour of the World Trade Center attacks, scam sites popped up on the Web according to ScamBusters.org (you can trust the information at Scambusters.org, they are a long-time client of ours).
So, before you make your contribution please take a few minutes to careful check the charity. To help, here are links to a couple of articles specifically about this.
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IRS to simplify, or try too, taxpayer notices
Posted by: | CommentsIf you’ve ever received a letter or notice from the IRS you know first-hand how confusing and confounding the information presented can be. All this while it has generally been my experience that the IRS really is not trying to confuse things with 
how they structure their correspondence — quite the opposite actually. The IRS really is doing what it can wrestling with implementing wildly complex tax laws created not by their doing, but by the doing of our legislators in Washington — while at the same time trying to be clear and concise to the taxpayer.
To this dilemma there just may be a little hope on the horizon. Read More→
Want your home buyer tax credit? I hope you are patient.
Posted by: | CommentsFor all of you that are eligible for the home buyer tax credit this filing season I have some news from the IRS administrative front. Don’t expect your tax refunds to come quickly. Oh, and you won’t be able to file your federal income tax return electronically either. And make sure you have all your closing paperwork at your fingertips.
The Internal Revenue Service today (Jan 15, 2010) released the new form that eligible
home buyers need to claim the first-time homebuyer credit this tax season and announced processing of those tax returns will begin in mid-February. The IRS also announced new documentation requirements to deter fraud related to the first-time home buyer credit.
The new form and instructions follow major changes in November to the home buyer credit by the Worker, Homeownership, and Business Assistance Act of 2009. The new law extended the credit to a broader range of home purchasers and added new documentation requirements to deter fraud and ensure taxpayers properly claim the credit. Read as… more paper work and yet again more paper work. Read More→
Finally, some sanity on taxing unemployment insurance benefits
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Well, partial sanity for one year anyway. The American Recover and Reinvestment Act of 2009 give a one-year exclusion for unemployment benefits you receive, up to a point.
For 2009 only, you can receive up to $2,400 of unemployment insurance benefits free of tax. There are none of the usual limitations based on your gross income with this provision.
Another important note, the $2,400 is per person and does not automatically double on a jointly filed tax return. For example, if you receive $5,000 of unemployment benefits and your spouse receives $500 you can exclude only $2,900. That is your full $2,400 and $500 of your spouse’s benefits.
It has never made any sense to me that unemployment benefits are taxed by our federal government. Essentially it is the feds deciding to effectively reduce your benefits by taking back part of your payments, possibly a significant portion. My personal opinion, it is kicking someone when they’re down. Bad form. Since this is just a one year change lets hope it may be the start of some sanity in Washington that just might lead to some permanent tax relief for the unemployed.
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Cash for Clunkers, Taxable?
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In June 2009 President Obama signed the Consumer Assistance to Recycle and Save Act of 2009 (how much caffeine had they had when they came up with that name?), commonly referred to as “Cash for Clunkers.” Auto dealers that signed up for this voluntary program received vouchers for qualifying trade-ins on the purchase off new cars where the fuel efficiency of the new car is better than the fuel efficiency of the clunker. The vouchers were for $3,500 or $4,500 depending on the how much you stepped up in fuel efficiency and they were treated as part of your down payment on your purchase. This applied for the period of Jul 1, 2009 until November 1, 2009. Read More→
Top Ten Facts About Child & Dependent Care Credit
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Did you pay someone to care for a child, spouse, or dependent last year? If so, you may be able to claim the Child and Dependent Care Credit on your federal income tax return. Below are the top 10 things you should know about claiming a credit for child and dependent care expenses. Read More→
Schedule A for itemized deductions, now Schedule L too
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Not since the direct deduction for some charitable contributions was removed has the standard deduction changed from its basic amount plus its additional amounts for the aged or blind.
In recent years, however, we’ve had three law changes that add to the standard deduction.
- The American Recovery and Reinvestment Act of 2009 added sales taxes paid on the purchase of a new car to the standard deduction.
- The Housing Act of 2008 added the property tax deduction for nonitemizers to the standard deduction.
- The Economic Stabilization Act of 2008 added a standard deduction for net disaster losses.
Of course, all these changes mean more forms to fill out and to review. Read More→
IRS eases (somewhat) rules to claim unrelated persons as dependents
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The IRS has ruled that an individual will no be treated as the qualifying child of a person if that person doesn’t make enough to file a return and either does not file a return or files a return solely to obtain a complete refund of withheld income taxes. The code provides that the term “dependent” means a “qualifying child” or a “qualifying relative.” Among other requirements, a qualifying relative cannot be the qualifying child of any other taxpayer.
So, to put it into an example. Jennifer supports as members of her household an unrelated friend, Rick, and Rick’s four-year-old child, Lisa. Rick has no gross income and is not required to file a return. Jennifer can claim both Rick and Lisa as qualifying relatives, provided all other requirements are met (provide more than one-half of their support, etc.).
IRS Publication 501 provides more detail if you need some lite nighttime reading.
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