Flyer "Quick Tips"

Posted by Bruce Mc on Dec 8, 2008 in Deductions, Exemptions, Form 1040 Information, News Flash, Opinions, Tax Preparation, Taxes | 0 comments

Some notes to ponder as the tax season draws near.

Ø  The IRS will no longer print and send estimated payment vouchers to taxpayers who use tax software to prepare their returns. Instead you are supposed to use the vouchers that are printed by your software. – meaning if you bought or used Turbo Tax, keep the ES vouchers that are printed.

Ø  Go to your tax appointment well organized. Have all your income statements separate from your expenses. Make sure you have all the proper SS numbers for dependents, as well as their names as they appear on their SS cards. Careful organization will save time come tax season. – I have a client organizer to help you or you can find several types of such on the internet.

Ø  If you receive/d a notice from the IRS, don’t assume it is correct. Many IRS notices just require more information. Always consult with your tax preparer before you make any payments or send information to the IRS.

Ø  Insurance policies that cover medical cost are deductible. Disability and loss of income are not. 

Ø  When making contributions of used furniture, appliances, and clothing to non-profit organizations, request a receipt from them. Attach a record of the items to the receipt for proof of donation. 

Ø  If you experienced a casualty loss (flood, fire, theft, etc.) which exceeds 10% of your AGI, ask your tax preparer what information is required to determine your deductible loss, if any. 

Ø  Your cost basis in mutual fund shares includes reinvested dividends.

Ø  Don’t forget to provide your tax preparer with a log of your business, medical, and charitable miles.

o   50.5 cents per mile for business {01/01 thru 06/30,2008}

o   58.5 cents per mile for business {07/01 thru 12/31,2008}

o   14 cents per mile for charitable

Ø  The cost for weight-loss programs can be deducted as a medical expense if the tax payer is diagnosed by a Doctor as obese or suffers from some other ailments such as hypertension, where weight loss would relieve the medical condition. Food is not deductible.

Ø  Expenses incurred for education for improving your skills for your present job or maintaining your job may be deductable. Things like seminars, tuition, books and some travel can be deductable. 

Ø  Job-seeking cost in the same field of employment are deductable. Successful job placement is not necessary. 

Ø  Part of a legal fee incurred in a divorce or an estate plan may be deductable if it is for advice on the tax consequences. Be sure to ask your attorney to clearly indicate how much of the fee was for tax advice. 

Ø  Keep receipts supporting tax deductions for at least four years. 

Ø  Improvement cast may reduce taxable profit upon sale of property. Keep records of improvements for four years. 

Ø  Employers are required to issue W-2s to employees by January 31 every year. – meaning they have until that date to get them in the mail [snail mail].

Ø  Are you starting a new business? There are many cost associated with the start-up of a new business that can be deducted after your business opens. To qualify the expense must be one that you could/can deduct as if you were already open. You are allowed to deduct the first $5,000.00 of expenses you incur in the first year you are “in” business. (you’re open). The remainder of your start up cost are deducted over a period of time not less than 180 months (15 years) – meaning if it cost you $6,000.00, the first 5k is an allowed deduction for startup cost, the remaining thousand is spread out over 15 years or $66.66 a year.

Ø  If allocated tips are listed on your W-2, the amount will be subject to both Social Security and income tax unless records (tip log) verify that a lesser amount was actually received. 

If you know some quick tips please ad them in your comment. Thank you.