Tax Articles

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Tax Jokes and Quotes
Do you realize that some tax forms ask you to check a box if you are BLIND? Quote: ?Two years ago it was impossible to get through on the phone to the IRS. Now it's just hard to get through. That's progress.? -Charles Rossotti, former IRS Commissioner Disappointed that you never had time to write the great American novel? Don?t fret, just go dig out your past tax returns. Quote: "The Eiffel Tower is the Empire State Building after taxes." Under...

Tax Changes You Should Know for 2005 Returns
Every year, you have to file tax returns and every year there are changes to the tax code. Here are some key changes for 2005 to keep in mind when you prepare returns. Tax Changes You Should Know for 2005 Returns 2005 was a fairly quite year when it came to changes to the tax code. Most changes were in the form of tweaks, instead of major overhauls. This break seems to have given the IRS a change to clean up some of its procedures as it has star...

IRS Issues Tax Credit Amounts For GM Trucks
As 2006 rolls along, the IRS is in the process of issuing tax credit amounts to particular hybrid vehicles. The agency has just issued the amounts for a number of GM vehicles. IRS Issues Tax Credit Amounts For GM Trucks As part of the Energy Policy Act of 2005, the tax advantages of owning a hybrid vehicle have been seriously upgraded. Prior to the Act, a person that purchased such a vehicle could claim a tax deduction of up to $2,000. While...

The Internet Tax Man Cometh
Q: I was contacted by the city tax collector to say that my business is scheduled to be audited to see if I owe sales tax on items purchased on the Internet. Can they really make me pay sales tax on internet purchase? I thought you could buy things online tax free? -- Charlie B. A: Sorry, but your local municipality is well within its rights to audit your business to identify items purchased online. The city can also demand payment of sales tax on...

IRS Issues Tax Credit Amount For Toyota Camry Hybrid
Prior to January 1, 2006, people purchasing hybrid vehicles were eligible to claim a significant tax deduction. Now they can claim a monstrously large tax credit. IRS Issues Tax Credit Amount For Toyota Camry Hybrid The government attempts to modify the behavior of taxpayers by applying or reducing taxes on certain activities. Alcohol and cigarettes are viewed as health risks, so the government adds excessive taxes to them to try to discourage ...

When Tax Day Comes Four Times A Year
For more than 10 million Americans, tax day comes up to four times a year. Many small business owners, as well as people earning income from investments, rental property or alimony, are often required to pay quarterly estimated taxes every April, June, September and January. Many filers struggle to determine how much they owe, or worse, forget to make payments altogether-a costly mistake when underpayment typically results in additional penalties ...

Why Income Tax Hurt Income Earners And Workers
All wealth redistribution comes in the form of the equivalent of tax and welfare. However, you need to be careful. Incorrect taxation schemes can result in less wealth for you. You see, by reading this website I would suppose that you?re poor or middle class wanting to skyrocket your income, right. Rich means owning a lot of money. If you?re poor and would want to get rich, you need to have a lot of income. So will income tax help? No! Abolish inco...

Car Donation Tax Deduction
Next to wanting to contribute to charitable causes, perhaps your biggest motivation to donate your car is the substantial tax break it can give you. Don?t be misled by information about your return, because the tax breaks you can get from a car donation may not be as big as you think. If your car donation is worth more than $500, then you should read ?Revenue Provisions? in Section 884 of Title VIII. This details the new restrictions on car d...

Tax Credits for Toyota Hybrids To Be Cut In Half
If you purchase a new hybrid car after January 1, 2006, you can get a major tax credit for doing so. Alas, the tax credits applicable for Toyota hybrids are about to be cut in half. Tax Credits for Toyota Hybrids To Be Cut In Half The government uses all types of methodology to modify our behavior. While many look for nefarious conspiracies and such, the government usually does it right before our eyes. The most obvious area of behavior modifica...

Tax Tips for Real Estate Investors Using IRA Funds
You?ve seen the advertisements and news articles. IRA funds can be used to make real estate investments. But before you jump on this bandwagon, make sure you understand some of the tax planning angles related to this opportunity. Passive Loss Deductions Almost always, an important component of your real estate profits comes from the tax savings associated with depreciation. These paper losses, referred to as passive losses by the Internal Revenue...

Managing Freelance Tax
According to business analysts, the home-based business trend is on the rise and a lot of people are jumping onto self-employment. The news is not surprising since there are many advantages in being self-employed and owning your own business. Aside from the fact that you can actually call something your own, there is also the sense of achievement brought by personal success. On the practical side, you get to be your own boss, which means that you d...

Tax planning to infinity and beyond...
Another year has come and gone and what?s really changed? Are you sitting in roughly the same place you were last year at this time with respect to your taxes?wondering what you could have done differently in your business to positively affect your year- end tax bill? All too often, when individuals and closely-held business owners begin discussing tax planning, what they really end up referring to is the process of tax compliance. Tax compliance...

3 Tips For Keeping Proper Tax Records For Your Home Business ? And Keeping The IRS Happy!
The last thing most people think about when starting a business is doing taxes. But proper planning will make doing your taxes much easier - and keep the IRS happy! Here are 3 simple tips for keeping proper records: 1. Whenever you buy anything for your business, keep the receipt! Not only will this make record keeping a lot simpler, but if you are ever audited (having your tax return reviewed in detail by the IRS), you can prove your expenses...

Will You Make The 39 Cent Mistake This Tax Season?
When it comes to filing your tax return, spending 39 cents could be the biggest mistake you ever make. Millions of taxpayers make the mistake of putting their income tax return in a regular letter-sized envelope, sticking on a 39 cent stamp, and placing the envelope in the mailbox. And millions of taxpayers "get away" with this mistake year after year. Why do I say that putting your tax return in the mailbox is a mistake? Let me explain. Every...

What to Look for in Online Tax Prep and Filing Software
You may have a less taxing time this April if you let computer software do much of the hard work filing with the IRS. You won't be alone. According to IRS data, more than 68 million tax returns were filed electronically last year, with more than 17 million taxpayers filing their own returns online. "There are a number of benefits that online tax prep and e-filing offer but you should do a little bit of homework first to get the greatest value fo...

Captial Gains Tax Explained
Capital Gains tax is a federal tax penalty that is imposed on capital accumulation, investment and productivity. Some of the income that is subject to capital gains tax includes the sale of an investment, a home, a family business, a farm or ranch or even a work of art. The capital gains tax is applied on the difference between the price paid for an item and the money received from selling it, or the capital gain. The most common form of capital ga...

Which 1099 Tax Forms concern you?
It?s tax time again and you must be sure to receive all the necessary forms. What is a 1099 tax form and who gets one? A Tax Form 1099 is used to report income other than wages, salaries and tips. Here of late, this term is used more and more frequently as many employers are opting to use contract labor versus hiring employees, who can turn out to be quite expensive when you factor in the insurance, payroll taxes, and other possible liability. If ...

Tax Returns - 7 Steps To Reduce Your Stress
The end of year tax return must be the most stressful part of running your own business. It is even worse if you have earnings abroad and have to fill in tax returns from those countries as well. How can you make life easier? 1. Start an accounts system. This can be in a hardbck ruled ledger that you can buy from any stationery store. 2. Keep receipts for everything. Enter these into your accounts once a week, or once a month 3. Enter any payme...

Heath Savings Accounts (HSAs) Mean Big Tax Savings
Concerned about the high cost of healthcare? Worried that your insurance doesn?t cover all your costs? Fortunately, a partial solution may be just around the corner. Since January 2004, taxpayers have had a tax savings tool called Health Savings Accounts, or HSAs. These HSAs may solve many of your healthcare cost problems. How an HSA Works In a nutshell, HSAs work like this. You buy a specific type of major medical, or catastrophic coverage, insu...

Smart Yearend Planning - Tax Deductions
There are three main areas we need to keep in mind as the year ends: 1. Taxes 2. Corporate formalities 3. Planning for next year Revisit the idea of converting your 10 largest expenses. This is an ongoing process that should be done at least twice the first year. It?s not realistic to expect you will convert all of your biggest expenses the first time around because it?s too big of a task?this is a habit needing to be developed over time. Our lar...

2006 List of Tax Scams Released by IRS
Every year, the IRS issues a list of tax scams. The goal is to alert taxpayers to the lack of merit of certain strategies as well as letting everyone know the IRS will not accept them. 2006 Scams The IRS has kicked out its annual list of highly dubious tax scams for 2006. Promoters often make these strategies sound credible, but they simply aren?t. If a taxpayer attempts to use one of the scams, the IRS will audit and aggressively attack the taxp...

Getting Tax Credits For Saving Energy
Homeowners looking to cut their tax bills may want to rethink their water heaters. A recently signed law allows people to take as much as a $300 tax credit if they install a tankless water heater in their house. The new tax credit is meant to encourage U.S. residents to better manage their energy consumption through the use of more efficient technology. Switching to such technology carries the added benefit of reducing utility bills overall e...

1031 Exchanges - The Legal Way To Defer Investment Property Capital Gains Tax
With the booming property prices of recent years, more and more people are finding themselves facing a large tax bill when they come to sell their investment properties. However, did you realize that there is a perfectly legal way of deferring payment of such taxes by utilizing the advantageous 1031 tax code that was introduced by the IRS in the early 1990s? A 1031 exchange is a way of deferring payment of capital gains tax on certain types of re...

In America There Are Two Tax Systems
"In America there are two tax systems, one for the informed and one for the uninformed. Both systems are legal." One of America's most famous jurists, Justice Learned Hand made this statement over forty years ago. When used today, one would certainly have to include the little understood world of Individual Retirement Accounts (IRA?s). The point I am making here is that we all need to keep ourselves informed about what IRA alternatives are availab...

Getting The Biggest Benefit From Tax Help
Taxes are a way of American life. They are own duty to pay and file. Many people go in search of someone to help them when tax time rolls around. Tax help seems to be in abundance from January 1st to April 15th. Unfortunately, some tax help is best avoided. Other times the tax help is something that many people have no idea how to find. Getting the biggest benefit from tax help depends why you need help in the first place and where you get that hel...

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