Do You Qualify for the Child Tax Credit?

February 15, 2012 / admin / No comments

The Child Tax Credit is available to eligible taxpayers with qualifying children under age 17. Here are a few facts about this credit. If you think you may qualify, please be sure to let us know.

The Child Tax Credit may reduce your federal income tax by up to $1,000 for each qualifying child under age 17.  A qualifying child must meet the criteria of seven tests: age, relationship, support, dependent, joint return, citizenship and residence.

  • Age: a child must have been under age 17 – age 16 or younger – at the end of 2011.
  • Relationship: the child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister or a descendant of any of these individuals, which includes your grandchild, niece or nephew. An adopted child is always treated as your own child. Read more
Category: Tax Deductions & Credits / Tags: , ,

Tax Season Means Scam Season

February 8, 2012 / admin / No comments

Tax season is prime time for online taxpayer scams. The most common form of scam attack is an email that appears to be from the IRS, asking for personal information. These emails may claim that there’s a problem with your return, or that you have an unclaimed refund, or some other pretext. Always, the email asks you to confirm your personal information and Social Security number or business taxpayer ID number, by clicking on a link in the email.

In a twist reported by Forbes, scammers are also sending emails that appear to be from Intuit. These emails make similar claims that you must click on a link in the email to confirm your identity so Intuit can process your return. Read more

Category: Data Security, Income Tax, News / Tags: , , ,

10 Ways Your Child Can Help Your Tax Return

February 3, 2012 / admin / No comments

Having children can affect your tax situation in many different ways, and most of these are tax benefits. Here’s a list of child-related credits and deductions that all parents should be aware of when preparing tax information.

1. Dependents In most cases, a child can be claimed as a dependent in the year they were born, so always let us know when you have a child or adopt one.

2. Child Tax Credit You may be able to take this credit for each of your children under age 17. If you do not benefit from the full amount of the Child Tax Credit, you may be eligible for the Additional Child Tax Credit. Read more

Category: Education, Income Tax, Tax Deductions & Credits, Tax Planning / Tags: , , , , , , ,

How to Boost Your Credit Score

January 25, 2012 / admin / No comments

Your credit score can affect how much you pay for loans, insurance, credit cards, and can even affect your ability to rent an apartment or get a new job. Here are several ways to keep your score high, or build it back up if you’ve lately experienced credit problems:

Pay your bills on time. A history of consistent ontime payments may be the most significant way to improve your credit score.  Bank loan and credit card bills are at the top of the list for timely payments, but utilities, insurance, and most other bills can also affect your score, especially if you consistently pay late.

Keep credit card balances low. Low balances not only reduce the interest you pay, they also make your overall credit look better. If any of your credit accounts have balances that are close to the credit limit, pay them down as quickly as you can. Read more

Category: Credit and Debt / Tags: ,

Claiming Tax Exemptions and Dependents for 2011

January 18, 2012 / admin / No comments

Everyone who files a personal tax return has to make a determination about claiming tax exemptions and dependents. Here’s a quick rundown for the 2011 tax year.

There are two types of tax exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,700 on your 2011 tax return.

Your spouse is never considered your dependent. On a joint return, you may claim one exemption for yourself and one for your spouse. If you’re filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer. Read more

Category: Income Tax, Tax Compliance / Tags: , ,

Get a Headstart on Filing Tax Returns for 2011

January 11, 2012 / admin / No comments

Electronic filing of tax returns for 2011 will start next week, so it’s not too early to think about bringing in your 2011 tax information. Here are the 4 easy steps to completing your share of the tax preparation:

1. Complete your Organizer and return it to us. If we prepared your 2010 tax return, we emailed you an Organizer on December 27, 2011. If you haven’t received it, please call us immediately. If you’re having trouble opening it, the password is your Social Security number with no dashes.

2. Gather any documents you need to support your tax information: Read more

Category: Income Tax / Tags: , , , , , ,

Last Minute 2011 Tax Deductions

December 28, 2011 / admin / No comments

You may still have time to claim a few 2011 tax deductions before December 31. Here’s a short list of actions you can still take for these tax deductions in 2011. For more tax savings and tax planning tips, see our year end newsletters for individuals and for businesses, available now on our website.

If you itemize deductions, make tax deductible donations to qualified charities no later than Dec. 31 to claim a deduction for 2011. Donations charged to a credit card by Dec. 31 are deductible for 2011, even if the bill isn’t paid until 2012. Keep a receipt, statement or cancelled check for each donation, showing the charity, amount and date.

Check your investments for gains and losses and consider sales by Dec. 31. You may normally deduct capital losses up to the amount of capital gains, plus $3,000 from other income. If your net capital losses are more than $3,000, the excess can be carried forward and deducted in future years. Read more

Category: Business Taxes, Income Tax, Tax Deductions & Credits, Tax Planning / Tags: , , , , , , ,

Tax Benefits Expiring in 2011 and 2012

December 21, 2011 / admin / No comments

This is a summary of major Individual Income Tax benefits that will expire for the next 2 tax years. The list is varied, so we recommend that you scan through it and give us a call if you have any question about whether these changes may apply to your situation.

Expiring December 31, 2011:

  • Personal tax credits applied against income tax no longer apply.
  • Higher alternative minimum tax exemptions revert back to extraordinarily-low thresholds.
  •  $250 school teacher expense deduction ends.
  •  Mortgage insurance premium deduction expires.
  •  State and local sales tax deductions expire.
  •  Tuition and related fees deduction end.
  •  IRA to charity tax-free transfers stop.
  •  2% Social Security tax reduction ends. Read more
Category: Tax Deductions & Credits, Tax Planning / Tags: , , , , ,

IRS Mileage Rates for 2012

December 14, 2011 / admin / No comments

The IRS has just announced the mileage rates for 2012, with the business mileage rate unchanged from the second half of 2011, at 55.5¢ per mile. The medical/moving rate is 23¢ per mile (down half a cent from 2011), while the 14¢ per mile charitable rate has not changed in over a decade.

While it’s important to know these rates when claiming your auto use deduction, equally important is having a mileage log that the IRS will accept as documentation for your claim.

The record can be in the form of a Dome Books mileage log, a plain notebook that you keep in your car, an Excel form, or one of the many software tools and cell phone mileage apps now available.

Whatever form you use, it’s critical that you be able to show that you maintained the log throughout the year, rather than putting together a list of trips and miles at the end of the year.  Read more

Category: Income Tax, Tax Compliance / Tags: , , ,

File 1099 Forms or Risk an Audit by the IRS

December 7, 2011 / admin / No comments

If you file a business tax return, two questions about 1099 forms on the return may determine whether you will be selected for an audit by the IRS:

  1. Do you have independent contractors or subcontractors that you paid in 2011?
  2. Did you file 1099 forms for 2011?

The IRS looks at both questions carefully, and if you answered “Yes” to #1, the answer to #2 should also be yes. If you say you filed 1099 forms for 2011, the IRS will verify that you filed them. If they see discrepancies in your 1099 filings, your chances of being audited increase significantly. Read more

Category: Business Taxes, Tax Compliance / Tags: , ,
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