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Bailout Package Extends Key Tax Breaks

One good result of all the recent economic turmoil has been that taxpayers, unlike last year, will not have to wait until the last minute for Congress to extend important tax breaks. The extension of these tax breaks was included in the historic bailout package signed into law by President Bush on October 3, 2008.

What Is A Capital Asset?

Most people who have investments such as stock and bonds are aware that stocks and bonds are capital assets and that the sale of stocks and bonds may be subject to the long-term capital gains rates of taxation that are much more advantageous than the tax rates on ordinary income. However, many investors are not aware exactly what constitutes the definition of a capital asset under the IRS rules and that not all capital assets are treated equally.

Margin Interest Deduction Has Its Limits

If you purchase stocks on margin you have what the IRS calls Investment Interest. Investment interest is deductible on your 1040 as an itemized deduction. However, there are stringent limits as to the amount of investment interest may be deducted in any one year.

States without Income Tax

The majority of states charge an income tax based on specific income brackets. Each bracket must pay a certain percentage or minimum amount. The amounts for the income brackets vary from state to state and can be significantly different. However, there are several states without income tax and many people are finding this to be an advantage to living in these areas of the country.

Income Tax Planning Time of Year

Well its that time of year again, everybody favorite time of year. You can hear the birds singing and the decorations are mounted... Yes of course, it must be tax season! Well don't fear tax season doesn't have to be the worst time of the year. It can actually be great if you learn the tricks to maximize your tax credits and minimize the tax your have to pay.

Income Tax Preparation-Checklist of Income Items

It's now late January and you're probably starting to get those tax information forms in the mail. As far as items of income that must be reported on your tax return, following is a checklist of the most common statements that you'll need to have in order to report income received.

Fernley Flood Victims and Volunteers

Locals and concerned people from afar are pulling together to help rebuild the lives of misplaced Fernley citizens. Please help if you can.

IRS Free File Looks Like A Good Tax Filing Option For Eligible Taxpayers

Free File, which is offered through the IRS website, offers a way for eligible taxpayers to file their tax returns for free. A taxpayer eligible for Free File must have an Adjusted Gross Income of $54,000 or less.

Most Taxpayers Unaffected By the Alternative Minimum Tax "Patch"

The IRS has announced that the "patch," or fix, that Congress passed late in 2007 that will prevent many middle income taxpayers from getting hit with the Alternative Minimum Tax, or ATM, may cause a delay in tax filing for about 13.5 million taxpayers. Fortunately, the vast majority of taxpayers will face no delay at all in the processing of their 2007 tax return.

Get A Tax Deduction For Unwanted Clothing and Household Items

At this time of the year, a lot of us like to go through our closets, gather up the clothes we don't need, and bundle them up to take to organizations like Goodwill Industries or the Salvation Army. We may also want to donate other household items we don't need. This helps us to get organized for the coming year, make a charitable contribution, and possibly even give us another tax deduction. However, to be able to benefit from a tax deduction, you need to keep the following rules in mind.

Charitable Contribution Tax Deduction Reminders

One of the greatest aspects of the Christmas season is that Christmas is the season for giving. Many people like to think that while they are in the Christmas spirit and helping others, they also like to know that they are helping themselves with a year-end tax deduction. Yet many people are confused about the IRS charitable tax deduction rules. Here are some of the most basic charitable deduction rules that taxpayers should keep in mind as they contribute this holiday season.

Tax Deductions from Investment Income

Many people know they have to pay income tax on the money they earn from investments. Despite this, many people don't realize that they may be eligible to deduct certain investment expenses from their taxable income. Investing is designed to reward the investor with the greatest reward at the least possible risk. With this in mind tax effects can dramitically increase or decrease the overall success of the investor. Many of the tax strategies this article will highlight can be found in more detail at http://www.incometaxplanningtips.com.

Beware The Expanded "Kiddie Tax"

The "Kiddie Tax Rules" have been expanded starting in Tax Year 2008 and will undoubtedly snag more taxpayers.

The "Kiddie Tax" refers to the rules that require a child's unearned income to be taxed at the parents' rate of taxation when the amount of a child's unearned income exceeds $1,700. Unearned income is interest, dividends, and capital gains income.

Millions of Taxpayers Overlooking Important Tax Breaks

According to a report by the U.S. Treasury Inspector General for Tax Administration, a Treasury Department unit, millions of people overlooked important tax breaks that they were entitled to on their 2006 tax returns. On the other hand, millions of people made mistakes and took deductions on their 2006 tax returns that they were not entitled to.

Beware of The Wash Sale Rules With Your Year End Planning.

In my blog of October 9, "Time To Plan Ahead To Minimize Taxes on 2007 Capital Gains," I wrote about the advantages of selling your stocks with losses to offset the capital gains from the stocks you are selling at a profit. However, investors who use this strategy should be careful not to violate what are known as the "Wash Sale Rules."

Time To Plan Ahead To Minimize Taxes on 2007 Capital Gains

It is hard to believe that its time to think about year end tax planning already. But, the truth is, the year is rapidly winding down and the earlier you act, the more options you will have to lower your 2007 tax bill. This is especially true if you have any stocks with appreciable gains for the year.

Reporting Interest On Your Tax Return

Information about any interest income you may have received in 2006 will be reported on a form called 1099-Int. Besides your W-2, the 1099-Int is one of the most frequently used forms in the preparation of an individual tax return. The 1099-Int is important because you must report all taxable interest.

Reporting Income: When Is Income Actually Received?

Many times a client will ask me a question like, "I did some consulting work in 2006, but I did not receive the check for payment of the services until January 2007. What year do I report this income, 2006 or 2007?

Preparing To File Your 2006 Tax Return: Reporting Your Income

In one sense, the US Tax Code makes reporting your income easy. Under the US Tax Code, all income is taxable unless it is specifically exempt. But the Tax Code does list numerous exemptions to this general rule which makes determining what is taxable and non-taxable income very confusing indeed.

In this blog, and in several others to follow, I will be explaining exactly what income is taxable and also give example of what income is non-taxable. In addition, I will be explaining the various types of information returns taxpayers will be receiving over the next few weeks and how to report the information that is shown on these information forms. These forms include, of course, the W-2, but also various kinds of 1099s such as 1099-Int, 1099-Div, 1099-Misc, and 1099-R, to name a few of the most common ones.

Preparing To File Your Taxes: Understanding Your W-2

As much as we may hate to admit it, the tax filing season is here. If your haven't already, you will soon be receiving a number of tax forms in the mail, such as W-2s and 1099s. To help make the tax filing process easier, in this next series of blogs I will be taking a look at the various tax forms that you will need in the process of preparing your 2006 tax return. In this blog, I will explain what those numbers in the various boxes on your W-2 form mean.

Pay Day loans, read the fine print!

What could be better than getting an advance on your tax refund from the IRS? Think of how you could use the money right now! I bet the payday loans and Tax Refund Loans as sounding good. Well, you better give some thought to the fees you are paying for that advance.

10 Ways To Reduce Tax For a Small Business

Everyone worries about taxes and looks for ways and means of reducing the tax burden. When you have a small business of your own you must stay up-to date of tax laws that pertain to “small businesses.” As a business owner you should use your account for tax planning. Sit down with your accountant and plan on ways of maintaining business expenses, filing receipts, planning on “tax saving” investments, and a strategy for running the business in the most beneficial way.

Don't Forget Telephone Tax Refund on Your 2006 Tax Return

Individual taxpayers will be able request a refund on federal excise taxes paid on long distance telephone service on their 2006 tax returns. The federal government stopped collecting these excise taxes in August 2006 and is going to refund those excise taxes billed after February 28, 2003 and before August 1, 2006. More than 146 million people are expected to file for the refund.

2006 Tax Legislation Was A Mixed Bag For Taxpayers.

Two major pieces of tax legislation went into effect in 2006. One of these new tax laws was the Tax Increase Prevention and Reconciliation Act which President Bush signed into law on May 17, 2006. The other major tax law legislation was the Pension Protection Act of 2006, signed into law by President
Bush on August 17, 2006. Both of these new laws have some provisions which help taxpayers, but, unfortunately, both of these new laws have provisions which may make some deductions harder to take or subject more income to higher tax rates.

Do You Expect Everything Served on a Silver Plate?

Have you ever considered why it's almost always people who subscribe to the saying "Never, never, never give up!" that succeed?

Consider this: stick-to-it-iveness is what separates the sheep from the goats.

Learn how you can improve your ability to stay with it, go the extra mile - and, ultimately, run a much better chance of actually succeeding...

Congress Passes Tax Breaks-What's Next?

Finally, at the very last minute, Congress passed The Tax Relief and Health
Care Act of 2006. Final passage came in the Senate at 2 a.m. on Sunday, December 9. This package extends or renews some popular tax breaks that had expired at the end of 2005. This new act makes the tax breaks retroactive to the beginning of 2006 and extends them through 2007.

Clock Is Ticking On 2006 529 Plan Tax Savings

With less than a month now until 2007, it's very important not to let any opportunities for tax savings slip by. One great tax savings vehicle is a college savings account known as a 529 Plan. On the federal level, contributions to a 529 Plan are not tax deductible, but investments into the plan are allowed to grow tax free and withdrawals are tax free if the money is used for qualifying college expenses. In addition, some states now, about thirty, allow a deduction for state income taxes for contributions made to 529 Plans. However, in most of the these states, contributions must be received by the December 31 of the year in which you wish to take the deduction. But, be aware that because December 31, 2006 is a Sunday and a non-business day, the states are requiring that contributions intended for 2006 be made no later than December
29, 2006. Contributions received after that will be counted for 2007.

Will Congress Pass Extensions of Popular Tax Breaks?

Congress has tried all year to renew a number of popular tax breaks that expired over eleven months ago - at the end of 2005. These tax breaks included "above the line" deductions for higher education expenses and teacher classroom expenses. "Above the line" deductions are beneficial to taxpayers because taxpayers can use "above the line" deductions even if they don't itemize on their tax returns. The expired breaks also included credits for businesses and a deduction for state sales taxes for taxpayers who live in states without a state income tax. This is the last week Congress is expected to be in session this year as lawmakers are eager to adjourn by the end of the week. Also, this is the last week Republicans will be in control of Congress.

IRS Announces Standard Mileage Rate For 2007

Yesterday, November 1, the IRS announced that the 2007 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.

Time For Year End Tax Planning

With only two months left in 2006, it certainly isn't too early to do year end tax planning. Once the calendar changes to 2007, there are very few options left as far as minimizing taxes for Tax Year 2006. So now is an excellent time to look at your earnings for 2006 as well as expected deductions and get an idea of what your 2006 tax liability is going to be. If it looks like your 2006 tax liability is going to be higher than you are comfortable with, now is the time to take some corrective action. Plus, it's far better to have an accurate idea now of your 2006 tax liability rather than receive an unpleasant surprise next April 15.

Tax Update September 15, 2006

Here's an update on tax changes that will affect tax years 2006 and 2007.
Most of the changes are a result of the Pension Protection Act of 2006 which was signed into law by President Bush on August 17, 2006.

The Pension Protection Act of 2006 is the most sweeping reform of US pension laws since the Economic Retirement Income Security Act was signed into law by President Ford in 1974. Actually, this law was long overdue as many hard working people saw their pensions disappear as a result of some of the corporate financial meltdowns, like Enron and Worldcom, over the past few years.

Some Major Changes For Charitable Contribution Deductions

On August 17, 2006, President Bush signed the Pension Protection Act of 2006. This was a massve bill and most of the provisions are aimed at requiring that companies adequately fund their pension plans. This bill is the largest pension bill since the Employee Retirement Income Security Act of 1974. Most of what the media has reported on this new law is the effect this law has on protecting workers' pension plans.

However, there are other provisions in the bill, among which, are some onerous new provisions regarding Charitable Contributions.

IRS Starts Using Private Collection Agencies

If you owe money to the IRS and haven't made arrangements to settle up with them, don't be surprised if one evening your dinner is interrupted by a call from a collection agency representing the IRS. The IRS has begun to implement its plan to turn over the collection of tax debts to private collection agencies, also known as PCAs.

Whatever Happened To Tax Reform?

You may remember that one of President Bush's top priorities during the 2004 presidential campaign was Tax Reform, a complete overhaul of the federal income tax system. But now, there's hardly even any mention of Tax Reform, either in the media or from the Bush administration. You'd think that with Congressional elections just around the corner in November, that you'd be hearing some talk of Tax Reform. But again, it's an issue that's vanished from the public eye. So, what's happened to Tax Reform?

"Survivor" Richard Hatch Goes To Prison For Failure To Pay Taxes!

The news came out today that the winner of the first season of "Survivor" has been sent to a federal prision in Oklahoma as he serves his 51 month sentence for failure to pay taxes on the $1 million won on the show. 51 months is a long time to have to be in prison. Here's a few thoughts on Mr. Hatch's receiving such a stiff sentence.

Taxes & Retirement - Do You Know How To Lower Your Taxes While You Save?

“There is nothing sinister in arranging one’s affairs as to keep taxes as low as possible… for nobody owes any public duty to pay more than the law demands.” - Judge Learned Hand

“The legal right of the taxpayer to decrease the amount of what otherwise would be his taxes or altogether avoid them by means which the law permits, cannot be doubted.” - Supreme Court in Gregory v. Helvering, 293 U.S. 465

When it comes to your retirement, there are vehicles you can use to lower your taxes...

Can You Deduct Your Summer Vacation?

Schools are out. The weather is hot. And, now, many of us are ready to take a long awaited summer vacation. However, with the costs of travel, accomodations and meals while on the road, we're finding that vacations are expensive this year. With vacations being so expensive, wouldn't it be nice if we could deduct the costs of our vacations on our tax returns. Is there any way vacations can be legally deducted?

"Kiddie Tax" Change Could Cause Big Problems!

The Tax Increase Prevention and Reconciliation Act Of 2005, also known as TIPRA, was signed into law by President Bush on May 17, 2006. This new law has benfits for individual taxpayers, most notably relief from the Alternative Minimum Tax by increasing the Alternative Minimum Tax exemption amounts.

However, this new law does have a nasty surprise. That surprise is the raising of the "Kiddie Tax" age limit to 18 years.

What To Do When You Can't Pay Your Taxes?

A common situation many taxpayers find themselves in is not being able to pay their taxes. Some taxpayers just know that they are going to owe so they don't even bother to file their returns. BIG MISTAKE! Other taxpayers file their returns but are unable to pay in all thay they owe. Others receive notices from the IRS showing adjustments to the taxpayer's and ask for additional payment.
So, what is one to do when one just doesn't have the money to pay?

How to Find a Tax Lawyer

How to find a tax lawyer is one of the most important questions that almost every one of us have faced in our life. No doubt, it is a matter related to your hard earned money so you need to be very careful. Believe it or not, choosing an experienced and competent tax lawyer/attorney is as important as choosing the right physician for your health. Therefore, to ensure the health of your wealth you should choose a lawyer with experience, and one who has a proven track record in the area of taxes.

How to Get IRS Tax Help

When we accept that no human being is perfect, it follows that the people running the IRS tax system are no better than you or me. They can and do make mistakes. Therefore it provides various channels that will help you with your IRS tax.

IRS Announces 2006 Inflation Adjustments

By law, a number of tax provisions must be adjusted annually to keep pace with inflation. The IRS has recently announced the inflation adjustments that will go into effect for Tax Year 2006. These changes are important because the changes adjust numbers that will affect every taxpayer. The most important changes include the following:

Don't Be Alarmed By Tax Reform Proposals

By now, you've now doubt heard of the howls of protest against the tax reforms put forth by President Bush's tax reform panel. The real estate industry has been one of the most vocal groups against the proposals. For example, the National Association of Realtors has been saying that the tax reform proposal of changing the mortgage interest deduction to a credit would cause real estate values to decline by 15 percent or more.

Update On Tax Reform-Can It Happen?

As expected, President Bush's Advisory Panel On Federal Tax Reform released its final report on Tuesday, November 1. The panel is recommending the most sweeping changes in the US tax laws in twenty years. The most sweeping changes involve doing away with many deductions and replacing them with tax credits. One of the most popular deductions the panel proposed getting rid of is the mortgage interest deduction. The mortgage interest deduction will be replaced with a credit. The credit will be limited to the first $1,000,000. Plus, mortgage interest on second homes will not be eligible for the credit.

IRS To Taxpayers: "No More Mr. Nice Guy."

Taxpayers beware! The IRS is going to become much more aggressive in the coming months about collecting the taxes that it is owed. The IRS estimates that the current tax gap - the difference between what is owed the government and what has been paid is $300 billion. That's a lot of moolah. And, the IRS figures that in this time of soaring budget deficits, that collecting on that $300 billion would do the country a lot of good. As IRS Commissioner Mark Everson recently said, "Certainly, if we can reduce the tax gap, that's really going to help the country. Also, I would say it's a question of basic respect for the rule of law. We can't have people not paying what they owe."

What Filing Your Taxes Will Be Like Under Tax Reform

President Bush's Advisory Panel on Federal Tax Reform released Tuesday the outlines of two proposals to reform the U.S. income tax. The details are sketchy at this point and it's anyone's guess at this point as to whether or not any of these proposals will ever become law. There's bound to be some vicious fights in Congress over some of the proposed cut in deductions. However, enough information has been released to get an idea of what filing your tax return would be like if either of these proposals actually become law.

Tax Panel Proposes More Changes

President Bush's Advisory Panel on Federal Tax Reform is moving in the direction of simplifying the paperwork, but cutting back even more some of the most popular tax deductions, according to Jeffrey Kupfer, the panel's executive director.

Tax Reform- A Hot Topic in the Coming Weeks

By November 1, 2005, after several postponements, President Bush's Advisory Panel on Federal Tax Reform is scheduled to release its recommendations. The panel's mission is to study ways to reform the US Tax Code to make it simpler.

Be Aware of Increased Mileage Rate Deduction For The Rest of 2005

Taxpayers using their cars for business purposes should be aware that the IRS,
in a special announcement this past summer, has set the business mileage rate deduction to 48.5 cents per mile, effective September 1, 2005 through December 31, 2005. This new rate is up from the 40.5 cents per mile in effect January 1, 2005 through August 31, 2005.

The Ticking Time Bomb of The Alternative Minimum Tax

The income taxes laws have a far reaching impact on us. Many of the expenses and obligations that we incur are done so on the basis of whether or not those expenses and obligations are tax deductible under current tax law. For example, homeowners will often buy larger houses knowing that mortgage interest and property taxes are deductible. Someone may buy a more expensive car using a home equity line of credit knowing that the interest from the home equity line of credit is tax deductible. People are encouraged to give more to charity knowing that charitable contributions are deductible.

But, what if, after incurring these expenses and obligations, many taxpayers discover that they can't deduct these expenses after all. Can it happen? Yes, it can and it is happening more frequently as more and more taxpayers are finding that they are being caught by a little understood section of the tax code known as the Alternative Minimum Tax(AMT).

Greater Tax Benefits For Hurricane Katrina Charitable Contributions!

The Katrina Emergency Tax Relief Act of 2005 also provides much more generous charitable contribution deductions for donations to Hurrican Katrina victims.

Hurricane Katrina Tax Breaks

Thankfully, Congress has reacted quickly to Hurricane Katrina by passing the Katrina Emergency Relief Act of 2005 within three weeks of Katrina's devestation of the Gulf coast. This legislation provides for some major tax breaks for those living in the affected areas as well as tax breaks for those living elsewhere who are providing donations and assistance for the victims.
Below are some of the major provisions of the Katrina Emergency Relief Act of 2005.