Archive for Tax Planning

10 Tips For Deducting Losses From A Disaster

National Hurricane Season is officially in progress. If you suffer damage to your home or personal property, you may be able to deduct the losses you incur on your federal income tax return. Here are ten tips you should know about deducting casualty losses:

1. Casualty loss. You may be able to deduct losses based on the damage done to your property during a disaster. A casualty is a sudden, unexpected or unusual event. This may include natural disasters like hurricanes, tornadoes, floods and earthquakes. It can also include losses from fires, accidents, thefts or vandalism.

2. Normal wear and tear. A casualty loss does not include losses from normal wear and tear. It does not include progressive deterioration from age or termite damage. Read More

Written by | Posted in Corporate • Expatriate • Federal • Income Tax • Individual • International • Tax Deductions • Tax Planning • Tax Tips

Travel And Entertainment: Maximizing Tax Benefits

Tax law allows you to deduct two types of travel expenses related to your business, local and what the IRS calls “away from home.”

First, local travel expenses. You can deduct local transportation expenses incurred for business purposes such as the cost of getting from one location to another via public transportation, rental car, or your own automobile. Meals and incidentals are not deductible as travel expenses, but you can deduct meals as an entertainment expense as long as certain conditions are met (see below).

Second, you can deduct away from home travel expenses, including meals and incidentals, but if your employer reimburses your travel expenses your deductions are Read More

Written by | Posted in Tax Deductions • Tax Planning • Tax Tips • United States

Claiming A Qualifying Relative On Your Tax Return

For you to claim a person as your Qualifying Relative, that person must either be:

(a) Related to you (generally by blood, adoption, or through marriage), or

(b) Be a member of your household for the entire year.

There are five tests to determine if you can claim a person as your Qualifying Relative. These tests are as follows:

1) The Not a Qualifying Child Test

If a child meets all the tests to be your qualifying child, that child cannot also be your Qualifying Relative. Also, if that child qualifies to be the Qualifying Child of another person, Read More

Written by | Posted in Individual • Tax Deductions • Tax Planning

Mid-Year Tax Planning Checklist

All too often, taxpayers wait until after the close of the tax year to worry about their taxes, missing opportunities that could reduce their tax liability or help them financially. Fall is the perfect time for tax planning. The following are some events that can affect your tax return; you may need to take steps to mitigate their impact and thus avoid unpleasant surprises after it is too late to address them.

• Did you get married, divorced, or become widowed?
• Did you change jobs or has your spouse started working?
• Did you have a substantial increase or decrease in income?
• Did you have a substantial gain from the sale of stocks or bonds?
• Did you buy or sell rental property? Read More

Written by | Posted in Individual • Tax Planning • Tax Tips

Tax Tips For Recently Married Taxpayers

This is the time of year for many couples to tie the knot. If you marry during 2015, here are some post-marriage tips to help you avoid stress at tax time.

1. Notify the Social Security Administration – Report any name change to the Social Security Administration so that your name and SSN will match when filing your next tax return. Informing the SSA of a name change is quite simple. File a Form SS-5, Application for a Social Security Card at your local SSA office. The form is available on SSA’s Web site, by calling 800-772-1213, or at local offices. Your income tax refund may be delayed if it is discovered your name and SSN don’t match at the time your return is filed.

2. Notify the IRS – If you have a new address, you should notify the IRS by sending Read More

Written by | Posted in Tax Planning • Tax Tips

Forgot Something On Your Tax Return? It’s Not Too Late To Amend The Return

If you discover that you forgot something on your tax return, you can amend that return after it has been filed. The need to amend can be because of:

• Receiving an unexpected or amended K-1 from a trust, estate, partnership, or S-corporation.
• Overlooking an item of income or receiving a corrected 1099.
• Failing to claim the correct advanced premium credit because of an incorrect 1095-A.
• Forgetting about a deducible expense.
• Forgetting about an expense that would qualify for a tax credit.

These are among the many reasons individuals need to amend their returns, whether it is Read More

Written by | Posted in IRS • Tax Planning

Start Planning Now For Next Year’s Taxes

You may be tempted to forget about your taxes once you’ve filed your tax return, but did you know that if you start your tax planning now, you may be able to avoid a tax surprise when you file next year?

That’s right. Now is a good time to set up a system so you can keep your tax records safe and easy to find. Here are six tips to give you a leg up on next year’s taxes:

1. Take action when life changes occur. Some life events such as a change in marital status or the birth of a child can change the amount of tax you pay. When they happen, you may need to change the amount of tax withheld from your pay. To do that, file a new Form W-4, Employee’s Withholding Allowance Certificate, with your employer. Read More

Written by | Posted in Tax Planning

Education Tax Credits Help You Pay For College

Are you planning to pay for college in 2015? If so, there are two education credits that can help you with the cost of higher education. Taking advantage of these education tax credits can mean tax savings on your federal tax return by reducing the amount of tax you owe. Here are some important facts you should know about education tax credits.

American Opportunity Tax Credit:

• You may be able to claim up to $2,500 per eligible student.

• The credit applies to the first four years at an eligible college or vocational school.

• It reduces the amount of tax you owe. If the credit reduces your tax to less than zero, Read More

Written by | Posted in Tax Planning

Your Personal And Dependent Exemptions

Claiming your eligible exemptions is very important, because exemptions directly reduce your taxable income. You are entitled to one personal exemption for yourself, one for your spouse (if filing a joint return), and one exemption for each dependent that you claim on your tax return. Knowing the criteria and requirements for claiming these exemptions will facilitate the preparation of your individual income tax return, and will ensure that you do not miss out on important tax benefits.

Exemptions are fixed amounts, calculated on a per person basis, and they reduce the amount of your income that is subject to income tax.
The exemption amounts are generally increased year by year, as adjusted for inflation, and the amount for tax year 2014 is $3,950 ($4,000 for tax year 2015). Each person for Read More

Written by | Posted in Individual • Tax Deductions • Tax Planning

Parents Can Get Credit For Sending Kids To Day Camp

With summer just around the corner, there is a tax break that working parents should know about. Many working parents must arrange for care of their children under 13 years of age (or any age if handicapped) during the school vacation period. A popular solution – with a tax benefit – is a day camp program. The cost of day camp can count as an expense towards the child and dependent care credit. But be careful; expenses for overnight camps do not qualify.

For an expense to qualify for the credit, it must be an “employment-related” expense; i.e., it must enable you and your spouse, if married, to work, and it must be for the care of your child, stepchild, or foster child, or your brother or sister or stepsibling (or a descendant of any of these) who is under 13, lives in your home for more than half the year and does not Read More

Written by | Posted in Individual • Tax Planning • Tax Tips

Planning Your IRA Withdrawal?

Advance planning can, in many cases, minimize or even avoid taxes on IRA distributions and other qualified plan distributions. When contemplating future retirement and when to begin tapping taxable IRA and other qualified retirement accounts, taxpayers need to consider a number of important issues.

Early Distributions (before 59.5) – If funds are withdrawn before reaching age 59 ½, the taxpayer is also subject to a 10% early withdrawal penalty (and state penalties if applicable) in addition to the income tax on the IRA distribution, unless what is referred to as the substantially equal payment exemption is utilized. Under this exception, an early retiree can begin taking substantially equal payments at least once a year over the owner’s life or joint lives of the owner and designated beneficiary. The payments must Read More

Written by | Posted in Estate Planning Tax • Retirement • Tax Planning

Choosing The Correct Filing Status – Head of Household (HOH)

If you are unmarried, or married but considered unmarried (see below) on the last day of the tax year, you can file Head of Household if the following conditions apply:

(a) You paid more than half the costs of keeping up a home for the tax year, and

(b) A qualified person (see definition below) lived with you for more than half of the tax year.

Filing Head of Household can have substantial financial benefits over filing as a single status taxpayer. In filing as Head of Household, one enjoys lower tax rates and a larger Standard Deduction. Read More

Written by | Posted in Income Tax • Individual • Tax Deductions • Tax Planning
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