Running a one-person business? Tired of the huge hit you take at tax time? Want to save money on your accounting and taxes? Consider these simple tips and tricks...
Tip 1: Use an accounting system
Oh sure. This sounds obvious. But unless you have a decent way to track both your income and your deductions, you not only won't know how much money you're making until tax time, you'll also miss or forget about tax deductions.
Something like Quicken or Microsoft Money will work just fine. If you need more bookkeeping horsepower than these checkbook programs provide, look at stepping up to QuickBooks or Microsoft Small Business Accounting.
Tip 2: Don't Incorporate
New business owners often rush to incorporate. But incorporation rarely makes sense for small businesses. And incorporation totally complicates your taxes and accounting.
What's a new business owner to do? Form a limited liability company instead. A limited liability company, or LLC, gives you all the same liability protection. But without the tax complexity of a corporation.
An LLC with just one owner, for example, gets treated for income tax purposes as a sole proprietorship. Which means to report your business activity to the IRS or state revenue folks, all you do is file a simple, one- or two-page schedule with your regular individual tax return.
Tip: Consider hiring your kids
If you have minor children and they help you out in your business-doing real work-consider hiring them. As long as they earn less than $5,000, they won't pay any income taxes on their wages nor any payroll taxes. Yet, you'll still get to write-off the amounts you pay them as business expenses. (This might be a neat way to save for a kid's college expenses.)
Tip 4: Consider hiring your spouse
While medical insurance is a deduction for income-tax purposes for sole proprietors, you can save far more in taxes by hiring your spouse and then setting up what's called a Section 105(b) plan. Such a plan lets you treat all of your family's medical expenses (insurance, out of pocket, deductibles and so on) deductions for both income tax purposes and self-employment tax purposes.
If you are interested in this, confer with a local tax practitioner. Section 105(b) plans can be a little tricky to understand if you haven't used them before.
Tip 5: Take the home office deduction
Hey, if you regularly and exclusively use some portion of your home for your business, go ahead and take the home office deduction.
Don't worry about this deduction being an audit flag. Or a hassle. The deduction is meant for people like you.
Tip 6: Set up a pension plan
If you want to save more than a regular IRA allows, set up a pension plan for your business. You can easily set up something like a SEP-IRA which will allow you to contribute up to twenty of your profit to a tax deferred account.
Example: If you make $50,000, you could use a SEP-IRA to contribute $10,000 to your pension account. And there are other good low-cost options available, too, such as SIMPLE-IRAs and one-person 401(k) plans.
To get more information on small business pension plans, contact the Vanguard Group at www.vanguard.com or Charles Schwab at www.schwab.com.
Tip 7: Learn and then use TurboTax or TaxCut
A final tip: In most cases, the taxes of sole proprietorship are pretty simple. So, rather than come to someone like me (a CPA) or an enrolled agent or one of those nationwide tax preparation firms, try doing your return yourself using tax software.
Programs like TurboTax and TaxCut work great for simple-situation sole proprietors.
Seattle CPA and financial planner Stephen L. Nelson, CPA says sole proprietors can save money on taxes and accountants by employing these seven, simple tricks.
Seattle CPA and financial planner Stephen L. Nelson CPA is the author of bestselling books about both Quicken and QuickBooks. He also publishes and edits the popular forming an s corp online web site.
Article Source: http://EzineArticles.com/?expert=Stephen_Nelson
3/24/2008
Inflation - The Slayer of Your Savings
Inflation is defined as: “A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services.”
To simplify matters a bit, it means the government has been deliberately debasing the value of our money for years, in order to meet its political policies
In 1912, you could purchase tickets for the finest first class three room suite on the Titanic for about $4350 US. Remember there was no income tax back then.
If the Titanic were still around, that suite would cost about 86,120 after-tax dollars – about $112,000 pre-tax, assuming a very modest 30% tax rate.
It is impossible to predict what inflation will do over the next 23 years, but over the last 23, inflation was devastating. What cost $1,000,000 in 1983 would now cost about $1,910,000 in 2005 – the last year for which numbers were available. Or put another way, what cost $523,500 in 1980, now costs a cool million.
The US dollar lost almost one half of its buying power. Imagine if you retired in 1983 on a $1000 a month fixed pension. At the end of 2005, it could only buy $523 worth of goods, if there were no such thing as taxes. Let’s be gentle and only reduce your pension by 15% for taxes – now you only have about $444 in buying power.
The early 80’s had high inflation and interest rates, which have fallen over the years. But the figures given above only reflect a 3.9% inflation rate.
I am using 1983 for a reason. The leading edge of the baby boom generation is turning 60 right now. The average male life expectancy for a 60 year old is 22.8 years. At 65, the life expectancy goes to 18.9 years. (The overall life expectancy for someone born in the US today is 77.6 years.) So the typical baby boomer will be around for about the next twenty three years.
As the United States grew, its leaders decided that they could not afford first gold coinage and later silver coins. Eventually, the US abandoned the gold standard and just began to print bits of paper backed by “the full faith and credit of the United States.”
The problem with that is that the government can and does print as many of these bits of paper – dollar bills – as they feel like. The only value they really have is that which people choose to give it.
Now we are even moving away from paper currency to a “cashless” society. You could spend a large portion of your life never handling currency of any kind if you choose to do so.
But that brings us back to inflation. As trade deficits soar and with the government trillions of dollars in debt, people start to assign less and less value to those bits of paper or those electronic entries on your bank statement.
The problem is that the paper money really has no intrinsic value.
So how do you protect yourself against inflation? The answer is simple, but hard to implement. You just have to make an after-tax return on your investments greater than the inflation rate.
This is hard to do with cash or money market investments. The interest rates rarely exceed the inflation rate, either pre or post tax, and the value of the cash is constantly deteriorating.
Let’s go back to the Double Eagle. In 1933, the last year it was minted, it had a value of $20 - it would buy you $20 worth of goods and services. You can still buy that double eagle today, but its numismatic value distorts the equation.
In April 2006, gold bullion is selling in the range of $595 per ounce. The Double Eagle’s reincarnation, the American Eagle, which contains an ounce of gold, sells for about $618.
It now takes $270 to buy what cost $20 in 1933. But gold is selling for over twice that amount. So the intrinsic value of gold has doubled, while the US dollar has fallen by half over a much shorter period of time.
Obviously gold has a much higher intrinsic value than paper currency and, for that reason, is attractive to investors.
Even after you have reached your “golden years”, you have to be aggressive with your investments. One share of General Electric stock - representing maybe one 50 millionth ownership of the company - has more intrinsic value that the dollar bill in your pocket.
So you have to stay invested in either the carefully picked stocks of financially solvent companies or in no-load, low cost, quality mutual funds.
Corporate and tax free bonds should play a role in diversifying your assets into something that holds up better than cash.
From there, there is an infinite supply of investment opportunities some of which are quite risky.
But holding real estate or Real Estate Investment Trusts (REIT’s) or gold coins, bullion, gold stocks or mutual funds will help you safely diversify among assets that are likely to not only hold their value, but appreciate better than inflation.
You cannot rely on your pension payments retaining their buying power, nor can you expect the government to control itself.
So keep inflation in mind and go after higher yields than you will get on your savings account. Otherwise you might outlive your money.
By: Chris Cooper. For more articles on retirement planning and personal finance, visit Credit Yourself.
Article Source: http://EzineArticles.com/?expert=Christopher_Cooper
To simplify matters a bit, it means the government has been deliberately debasing the value of our money for years, in order to meet its political policies
In 1912, you could purchase tickets for the finest first class three room suite on the Titanic for about $4350 US. Remember there was no income tax back then.
If the Titanic were still around, that suite would cost about 86,120 after-tax dollars – about $112,000 pre-tax, assuming a very modest 30% tax rate.
It is impossible to predict what inflation will do over the next 23 years, but over the last 23, inflation was devastating. What cost $1,000,000 in 1983 would now cost about $1,910,000 in 2005 – the last year for which numbers were available. Or put another way, what cost $523,500 in 1980, now costs a cool million.
The US dollar lost almost one half of its buying power. Imagine if you retired in 1983 on a $1000 a month fixed pension. At the end of 2005, it could only buy $523 worth of goods, if there were no such thing as taxes. Let’s be gentle and only reduce your pension by 15% for taxes – now you only have about $444 in buying power.
The early 80’s had high inflation and interest rates, which have fallen over the years. But the figures given above only reflect a 3.9% inflation rate.
I am using 1983 for a reason. The leading edge of the baby boom generation is turning 60 right now. The average male life expectancy for a 60 year old is 22.8 years. At 65, the life expectancy goes to 18.9 years. (The overall life expectancy for someone born in the US today is 77.6 years.) So the typical baby boomer will be around for about the next twenty three years.
As the United States grew, its leaders decided that they could not afford first gold coinage and later silver coins. Eventually, the US abandoned the gold standard and just began to print bits of paper backed by “the full faith and credit of the United States.”
The problem with that is that the government can and does print as many of these bits of paper – dollar bills – as they feel like. The only value they really have is that which people choose to give it.
Now we are even moving away from paper currency to a “cashless” society. You could spend a large portion of your life never handling currency of any kind if you choose to do so.
But that brings us back to inflation. As trade deficits soar and with the government trillions of dollars in debt, people start to assign less and less value to those bits of paper or those electronic entries on your bank statement.
The problem is that the paper money really has no intrinsic value.
So how do you protect yourself against inflation? The answer is simple, but hard to implement. You just have to make an after-tax return on your investments greater than the inflation rate.
This is hard to do with cash or money market investments. The interest rates rarely exceed the inflation rate, either pre or post tax, and the value of the cash is constantly deteriorating.
Let’s go back to the Double Eagle. In 1933, the last year it was minted, it had a value of $20 - it would buy you $20 worth of goods and services. You can still buy that double eagle today, but its numismatic value distorts the equation.
In April 2006, gold bullion is selling in the range of $595 per ounce. The Double Eagle’s reincarnation, the American Eagle, which contains an ounce of gold, sells for about $618.
It now takes $270 to buy what cost $20 in 1933. But gold is selling for over twice that amount. So the intrinsic value of gold has doubled, while the US dollar has fallen by half over a much shorter period of time.
Obviously gold has a much higher intrinsic value than paper currency and, for that reason, is attractive to investors.
Even after you have reached your “golden years”, you have to be aggressive with your investments. One share of General Electric stock - representing maybe one 50 millionth ownership of the company - has more intrinsic value that the dollar bill in your pocket.
So you have to stay invested in either the carefully picked stocks of financially solvent companies or in no-load, low cost, quality mutual funds.
Corporate and tax free bonds should play a role in diversifying your assets into something that holds up better than cash.
From there, there is an infinite supply of investment opportunities some of which are quite risky.
But holding real estate or Real Estate Investment Trusts (REIT’s) or gold coins, bullion, gold stocks or mutual funds will help you safely diversify among assets that are likely to not only hold their value, but appreciate better than inflation.
You cannot rely on your pension payments retaining their buying power, nor can you expect the government to control itself.
So keep inflation in mind and go after higher yields than you will get on your savings account. Otherwise you might outlive your money.
By: Chris Cooper. For more articles on retirement planning and personal finance, visit Credit Yourself.
Article Source: http://EzineArticles.com/?expert=Christopher_Cooper
3/23/2008
Payroll Tax
If you are about to start a new business, organization or company, you should definitely have an idea about payroll tax, how to do calculations and why they are important in the USA. Payroll taxes are a major source of tax revenue for state and federal governments, generating funds for unemployment and welfare checks.
Pay roll tax is the Federal and state taxes that an employer is required to deduct and pay to the government on behalf of employees. These include state and federal income taxes, social securities and Medicare taxes that are withheld from the wages of an employee. The employer has to contribute to these taxes, the same amount that is deducted from the employees. Payroll tax also includes the state and federal unemployment taxes paid by a company to the government; this means employers have to pay the State and Federal unemployment tax.
In the United States, payroll taxes pay for two insurance systems namely Social Security and Medicare. Social security that comes under payroll tax includes insurance policies for retirement, disability, hospital, workers’ compensation and many more. Medicare is the insurance policy that covers elderly people, mostly above 65 years of age. Being a regressive tax, it is much more expensive that income taxes. Like any regressive tax, the payroll tax takes a large proportion of income from those who draw low incomes.
The important feature of payroll tax is that it requires the employer to contribute. For example, if 7 percentage of an employee’s income is withheld for social security, the same amount has to be put in by the employer for the payroll tax. This means that self-employed people will have to bear the burden of the entire tax. These are calculated and deducted according to state and Federal tax structures.
Payroll Tax provides detailed information on Payroll Tax, Federal Payroll Tax, Payroll Tax Calculators, How to Calculate Payroll Tax and more. Payroll Tax is affiliated with Payroll Software.
Article Source: http://EzineArticles.com/?expert=Seth_Miller
Pay roll tax is the Federal and state taxes that an employer is required to deduct and pay to the government on behalf of employees. These include state and federal income taxes, social securities and Medicare taxes that are withheld from the wages of an employee. The employer has to contribute to these taxes, the same amount that is deducted from the employees. Payroll tax also includes the state and federal unemployment taxes paid by a company to the government; this means employers have to pay the State and Federal unemployment tax.
In the United States, payroll taxes pay for two insurance systems namely Social Security and Medicare. Social security that comes under payroll tax includes insurance policies for retirement, disability, hospital, workers’ compensation and many more. Medicare is the insurance policy that covers elderly people, mostly above 65 years of age. Being a regressive tax, it is much more expensive that income taxes. Like any regressive tax, the payroll tax takes a large proportion of income from those who draw low incomes.
The important feature of payroll tax is that it requires the employer to contribute. For example, if 7 percentage of an employee’s income is withheld for social security, the same amount has to be put in by the employer for the payroll tax. This means that self-employed people will have to bear the burden of the entire tax. These are calculated and deducted according to state and Federal tax structures.
Payroll Tax provides detailed information on Payroll Tax, Federal Payroll Tax, Payroll Tax Calculators, How to Calculate Payroll Tax and more. Payroll Tax is affiliated with Payroll Software.
Article Source: http://EzineArticles.com/?expert=Seth_Miller
3/22/2008
Arizona Tax Lawyers
Tax law illustrates the government levies on economic transactions, generally called taxes. Tax law has been made a sub-discipline and an area of specialist study in law schools. Even though tax law specialists can involve in litigation, they are mainly engaged in consultative roles.
Various laws are enforced for proper tax payments. The taxes can be in the form of income tax, sales tax, excise tax, property tax, inheritance tax, and corporate tax. As tax law is a specialization in Arizona, the demand of Arizona tax lawyers also increases day by day throughout the state.
There are five state tax brackets within Arizona's tax structure. The rates of these tax brackets vary from 2.87 to 5.04 percent. As these taxes are not exactly the easiest of topics to grasp for an ordinary person, the assistance of an Arizona tax lawyer becomes essential. Also, many people find it difficult to be constantly updated on the Arizona tax system. For them, the best choice is to trust an Arizona tax lawyer, well acquainted with the current and up-to-date tax laws and regulations in the state.
Arizona tax lawyers are provided specialization certificates by the Arizona Board of Legal Specialization. Experience, training, and written examination are the minimum qualifications to certify as a specialist.
An Arizona tax lawyer comes with a helping hand when you find yourself in trouble with the Internal Revenue Service (IRS) - the arm of the Treasury Department responsible for income tax. An Arizona tax lawyer can help lessen the potential financial penalty levied by the IRS. He also reduces the stress related to revenue services and resolves tax problems quickly and efficiently.
Arizona Lawyers provides detailed information on Arizona Lawyers, Arizona DUI Lawyers, Arizona Criminal Defense Lawyers, Arizona Divorce Lawyers and more. Arizona Lawyers is affiliated with Colorado Employment Lawyers.
Article Source: http://EzineArticles.com/?expert=Jason_Gluckman
Various laws are enforced for proper tax payments. The taxes can be in the form of income tax, sales tax, excise tax, property tax, inheritance tax, and corporate tax. As tax law is a specialization in Arizona, the demand of Arizona tax lawyers also increases day by day throughout the state.
There are five state tax brackets within Arizona's tax structure. The rates of these tax brackets vary from 2.87 to 5.04 percent. As these taxes are not exactly the easiest of topics to grasp for an ordinary person, the assistance of an Arizona tax lawyer becomes essential. Also, many people find it difficult to be constantly updated on the Arizona tax system. For them, the best choice is to trust an Arizona tax lawyer, well acquainted with the current and up-to-date tax laws and regulations in the state.
Arizona tax lawyers are provided specialization certificates by the Arizona Board of Legal Specialization. Experience, training, and written examination are the minimum qualifications to certify as a specialist.
An Arizona tax lawyer comes with a helping hand when you find yourself in trouble with the Internal Revenue Service (IRS) - the arm of the Treasury Department responsible for income tax. An Arizona tax lawyer can help lessen the potential financial penalty levied by the IRS. He also reduces the stress related to revenue services and resolves tax problems quickly and efficiently.
Arizona Lawyers provides detailed information on Arizona Lawyers, Arizona DUI Lawyers, Arizona Criminal Defense Lawyers, Arizona Divorce Lawyers and more. Arizona Lawyers is affiliated with Colorado Employment Lawyers.
Article Source: http://EzineArticles.com/?expert=Jason_Gluckman
3/21/2008
Ten Tips On Becoming a Tax Preparer and Earning Big While Working P/T
1. Gain new professional and marketable skills while working at your own pace. – Every year there is a noticeable shortage of qualified Tax professionals. All 4 of the major Tax service Franchises (H & R Block, Jackson Hewlett, Liberty Tax, and Instant Tax) set up tax classes to increase the possibility of having enough tax professionals to work in their Franchises. Unfortunately, having taught these basic tax classes, the student drop out rate is high. It is serious pressure to work a full time job, learn tax law/codes, go to school two nights a week, do your homework, and prepare for Thanksgiving in the middle of the Tax Class Schedule. Online Tax School could be a life saver, especially if you have children. (Instant Tax does offer training starting any time of the year)
2. You can be enrolled, trained and certified to do Taxes in the state of California or any of the 50 States by the time the big boys offer their $200 Tax Class in September, October or crash course in November.
3. Train to the state of California’s standards. Not all states have a mandatory requirement to obtain a Tax License, however, once you qualify under California’s standards you will be qualified for an entry level position with IRS or to work for one of the major Temporary Accounting Agencies, such as AccountTemp or Accountants, Inc or Robert Half, International or a CPA or a Major Bookkeeping Company or to work for your self. Being able to take your time and learn at your own pace is extremely important when it can mean the difference of $7.50 per hour and $18 to $25.00 per hour
4. When you enroll in an Online Tax class, you don’t have to deal with class room dynamics, you just do your course work, take your test on line, email your teacher if you have a question and receive your certificate and follow through with your State’s requirements for Tax Professionals and of course register with IRS. No Problem, No fuss. All the information is provided in the class.
5. Taxes Will Travel a mobile Tax Service in the San Francisco Bay Area actually provides job placements for graduates from its Online Tax School and is one of the only mobile tax service Franchise available in the country. The TWT curriculum is provided by Educational wholesalers located on the East Coast. The Wholesaler for the learning material actually holds the licenses for the different state qualifications. The uniqueness of these programs comes with the policy and procedure of the different online schools.
6. Completion of Tax School will enable you to start your own tax business in your home or office. This will enable you to charge up to $50.00 per hour and in some cases much more if you go on to become an Enrolled Agent.
7. Online Tax Schools that can qualify you for California’s standards range from $199 to over $1500. Its very interesting because, remember the Educational Wholesale Provider I spoke of? They usually provide the training for over 50% of the Online Tax Training.
8. Tax School won’t make you rich, but it will give you options, a foundation for a new career and around $7,500 to $15,000 more income per year working part-time. The Big Boys, as I call them often pay their employees Bonus based upon the revenue after the Tax Season ends, plus they get a base hourly wage.
9. Enrolling and completing tax school will put you in the line up for what I call the “Half-Year Tax Professionals” They do taxes 5 or 6 months out of the year and spend the other half of the year traveling. How do I know? I meet them at the IRS Tax Professional Forum which is usually held in large cities such as Las Vegas! They adjust their travel schedules to accommodate and attend the IRS conventions; after all, you have to act like you work all year! This select group of people is the envy of all of the new tax professionals. However, you should know these Tax Professionals work hard and smart. They rarely loose a client, they send birthday cards to clients and gift certificates for special occasions and quarterly tax newsletters. They spend years building their client base while charging $150 to $200 (sometimes more) per tax return. They tend to stay out of their client’s personal lives and they live modestly while traveling to different parts of the world each year. (I personally give my client’s a gift when I deliver their taxes. My clients are spoiled, they don’t know what it is to sit in a tax office and wait. For them Taxes Will Travel is the way to go!)
10. There is a new, service that has consumers in the tax industry buzzing. It’s the “get your refund the last week of December or the first week of January” If your last pay period for the year is December 15 through the 28th and you had your taxes completed at one of the tax stores that provides this service you can get your refund, using your paycheck stub, before Christmas or New Year’s. At the time this article was published more information was still becoming available on this new service. This will surely generate more excitement in the Tax Industry. Tax stores more then likely will charge a little more for this unique service, and a little more times 5 to 10 million people is a LOT more, so this might be the time to enroll in your nearest online tax school.
Cassandra teaches basic tax classes in the San Francisco Bay Area. The balance of the year she can be found working in her small tax service providing tax resolution and accounts receivable lines of credit for small businesses.
Article Source: http://EzineArticles.com/?expert=Cassandra_Ingraham
2. You can be enrolled, trained and certified to do Taxes in the state of California or any of the 50 States by the time the big boys offer their $200 Tax Class in September, October or crash course in November.
3. Train to the state of California’s standards. Not all states have a mandatory requirement to obtain a Tax License, however, once you qualify under California’s standards you will be qualified for an entry level position with IRS or to work for one of the major Temporary Accounting Agencies, such as AccountTemp or Accountants, Inc or Robert Half, International or a CPA or a Major Bookkeeping Company or to work for your self. Being able to take your time and learn at your own pace is extremely important when it can mean the difference of $7.50 per hour and $18 to $25.00 per hour
4. When you enroll in an Online Tax class, you don’t have to deal with class room dynamics, you just do your course work, take your test on line, email your teacher if you have a question and receive your certificate and follow through with your State’s requirements for Tax Professionals and of course register with IRS. No Problem, No fuss. All the information is provided in the class.
5. Taxes Will Travel a mobile Tax Service in the San Francisco Bay Area actually provides job placements for graduates from its Online Tax School and is one of the only mobile tax service Franchise available in the country. The TWT curriculum is provided by Educational wholesalers located on the East Coast. The Wholesaler for the learning material actually holds the licenses for the different state qualifications. The uniqueness of these programs comes with the policy and procedure of the different online schools.
6. Completion of Tax School will enable you to start your own tax business in your home or office. This will enable you to charge up to $50.00 per hour and in some cases much more if you go on to become an Enrolled Agent.
7. Online Tax Schools that can qualify you for California’s standards range from $199 to over $1500. Its very interesting because, remember the Educational Wholesale Provider I spoke of? They usually provide the training for over 50% of the Online Tax Training.
8. Tax School won’t make you rich, but it will give you options, a foundation for a new career and around $7,500 to $15,000 more income per year working part-time. The Big Boys, as I call them often pay their employees Bonus based upon the revenue after the Tax Season ends, plus they get a base hourly wage.
9. Enrolling and completing tax school will put you in the line up for what I call the “Half-Year Tax Professionals” They do taxes 5 or 6 months out of the year and spend the other half of the year traveling. How do I know? I meet them at the IRS Tax Professional Forum which is usually held in large cities such as Las Vegas! They adjust their travel schedules to accommodate and attend the IRS conventions; after all, you have to act like you work all year! This select group of people is the envy of all of the new tax professionals. However, you should know these Tax Professionals work hard and smart. They rarely loose a client, they send birthday cards to clients and gift certificates for special occasions and quarterly tax newsletters. They spend years building their client base while charging $150 to $200 (sometimes more) per tax return. They tend to stay out of their client’s personal lives and they live modestly while traveling to different parts of the world each year. (I personally give my client’s a gift when I deliver their taxes. My clients are spoiled, they don’t know what it is to sit in a tax office and wait. For them Taxes Will Travel is the way to go!)
10. There is a new, service that has consumers in the tax industry buzzing. It’s the “get your refund the last week of December or the first week of January” If your last pay period for the year is December 15 through the 28th and you had your taxes completed at one of the tax stores that provides this service you can get your refund, using your paycheck stub, before Christmas or New Year’s. At the time this article was published more information was still becoming available on this new service. This will surely generate more excitement in the Tax Industry. Tax stores more then likely will charge a little more for this unique service, and a little more times 5 to 10 million people is a LOT more, so this might be the time to enroll in your nearest online tax school.
Cassandra teaches basic tax classes in the San Francisco Bay Area. The balance of the year she can be found working in her small tax service providing tax resolution and accounts receivable lines of credit for small businesses.
Article Source: http://EzineArticles.com/?expert=Cassandra_Ingraham
3/20/2008
Federal Help That Reduces Your Income Tax
When planning your tax strategy for the year, you'll be glad to know that you can significantly lessen (or even eliminate) your income tax liabilities if you know what deductions and credits are available to you. For example, retirement planning can have a net positive tax impact. Similarly, owning your own home has positive implications for you. And, although college is more expensive now than ever, you can send your children to college and garner substantial tax benefits at the same time.
Here are some things to consider:
Let's assume for the purpose of discussion that you're married, with three kids (two in college) and you're employed full time. Your annual income is $76 thousand. And let's assume that you are making these plans at the beginning of the tax year, so that you have an entire 12 months to implement it.
One significant tax break you can get is by putting money into a 401k Plan.
If both you and your spouse each put five thousand dollars into your 401k account, that would reduce your annual taxable income by ten thousand dollars. This means that your adjusted gross income is $66 thousand. That will yield a substantial tax savings. Another significant tax break comes to you when you buy a house -- and itemize all your deductions.
Let's say you paid mortgage interest to the tune of $16 thousand. In addition, you paid real estate taxes of five thousand dollars. You also made charitable donations totaling $3500 to your church, synagogue, mosque or some other eligible organization. For purposes of discussion, let's say you live in a state that charges you income tax and you paid three thousand dollars.
Your itemized deductions equal $27,500. Now, your adjusted gross income is down from $66 thousand to $38,500.
If you claim 5 personal exemptions, your taxable income is reduced another $15 thousand to $23,500. Your income tax bill is going to be approximately three thousand dollars.
Now, let's see if we can whittle that down some more. How about using some relevant tax credits? Since two of your kids are in college, let's assume that one costs you $15 thousand in tuition. There is a tax credit called the Lifetime Learning Tax Credit -- worth up to two thousand dollars in this case. Also, your other child may qualify for something called the Hope Tax Credit of $1,500. Consult your tax professional for the most current advice on these two tax credits. But assuming you qualify, that will reduce your bottom line tax liability by $3500. Since you owed three thousand dollars, your tax is now zero dollars.
Not bad!
Lastly, since we are planning this strategy at the beginning of the tax year, you should go ahead and adjust your withholding amounts.
Since you've effectively done the planning ahead to reduce your tax liability to zero, you can go ahead and adjust your withholding to zero as well. But don't stop there: open up a Roth IRA (both of you) and put the excess cash there before you even have a chance to spend it. And if you have anything left over, set aside some money for your third child who isn't due to enroll in college for a few years yet.
Conclusion
With some help from the Federal tax code, you can reduce your income tax to zero. It just takes some knowledge, planning and action.
For more info on Federal Help That Reduces Your Income Tax, visit Ara Rubyan's Your Tax Help Online
Ara Rubyan isn't an accountant, an attorney, or a financial guru. Instead, he is like you: a consumer who has tried to make an informed decision on the best way to manage his tax obligations.
Now, he's put all his research (so far) in one convenient location and he's sharing it with you, no strings attached. Visit his website. You'll find:
* Lots of articles on various tax help topics;
* Videos;
* Interactive polls;
* Latest news on tax help resources;
* Your questions, answers and suggestions.
As always, consult a qualified professional when looking for tax help. In the meantime, go on over to Your Tax Help Online and have a look.
Article Source: http://EzineArticles.com/?expert=Ara_Rubyan
Here are some things to consider:
Let's assume for the purpose of discussion that you're married, with three kids (two in college) and you're employed full time. Your annual income is $76 thousand. And let's assume that you are making these plans at the beginning of the tax year, so that you have an entire 12 months to implement it.
One significant tax break you can get is by putting money into a 401k Plan.
If both you and your spouse each put five thousand dollars into your 401k account, that would reduce your annual taxable income by ten thousand dollars. This means that your adjusted gross income is $66 thousand. That will yield a substantial tax savings. Another significant tax break comes to you when you buy a house -- and itemize all your deductions.
Let's say you paid mortgage interest to the tune of $16 thousand. In addition, you paid real estate taxes of five thousand dollars. You also made charitable donations totaling $3500 to your church, synagogue, mosque or some other eligible organization. For purposes of discussion, let's say you live in a state that charges you income tax and you paid three thousand dollars.
Your itemized deductions equal $27,500. Now, your adjusted gross income is down from $66 thousand to $38,500.
If you claim 5 personal exemptions, your taxable income is reduced another $15 thousand to $23,500. Your income tax bill is going to be approximately three thousand dollars.
Now, let's see if we can whittle that down some more. How about using some relevant tax credits? Since two of your kids are in college, let's assume that one costs you $15 thousand in tuition. There is a tax credit called the Lifetime Learning Tax Credit -- worth up to two thousand dollars in this case. Also, your other child may qualify for something called the Hope Tax Credit of $1,500. Consult your tax professional for the most current advice on these two tax credits. But assuming you qualify, that will reduce your bottom line tax liability by $3500. Since you owed three thousand dollars, your tax is now zero dollars.
Not bad!
Lastly, since we are planning this strategy at the beginning of the tax year, you should go ahead and adjust your withholding amounts.
Since you've effectively done the planning ahead to reduce your tax liability to zero, you can go ahead and adjust your withholding to zero as well. But don't stop there: open up a Roth IRA (both of you) and put the excess cash there before you even have a chance to spend it. And if you have anything left over, set aside some money for your third child who isn't due to enroll in college for a few years yet.
Conclusion
With some help from the Federal tax code, you can reduce your income tax to zero. It just takes some knowledge, planning and action.
For more info on Federal Help That Reduces Your Income Tax, visit Ara Rubyan's Your Tax Help Online
Ara Rubyan isn't an accountant, an attorney, or a financial guru. Instead, he is like you: a consumer who has tried to make an informed decision on the best way to manage his tax obligations.
Now, he's put all his research (so far) in one convenient location and he's sharing it with you, no strings attached. Visit his website. You'll find:
* Lots of articles on various tax help topics;
* Videos;
* Interactive polls;
* Latest news on tax help resources;
* Your questions, answers and suggestions.
As always, consult a qualified professional when looking for tax help. In the meantime, go on over to Your Tax Help Online and have a look.
Article Source: http://EzineArticles.com/?expert=Ara_Rubyan
3/19/2008
Outsourcing Tax Returns Can Be As Simple As 1-2-3!
When you want to have your tax return papers processed by overseas providers, there are several service providers you can choose from. Most of the leading outsourcing companies offer tax preparation outsourcing assistance. If you want to get your tax returns done in India, a good outsourcing firm will do the job for you.
The idea of providing outsourced tax preparation services started about 5-6 years ago; and has become increasingly popular ever since. Recently, there have been many accounting agencies choosing to avail of an outsourcing tax preparation help for various reasons. For one, this service allows accounting agencies to reduce the costs of operation. What is more, it helps them increase the efficiency of their job. Plus, they are able to rise above the competition; what with the huge amount of assistance that they are able to offer to their own clients.
There are a lot of benefits which you can get from the outsourcing tax preparation. One of these is the chance to minimize your costs for your own tax preparation operations. You will be able to cater to the needs of your customers quickly. In turn, your customer service will improve. The normal turnaround duration of tax returns run from one to two business days. You are offered with flexible help options in order for you to comply with the specifications of your work. When you turn to a professional outsourcing firm your tax data is guaranteed to be secure and confidential.
Most reliable tax outsourcing firms capable of offering outsourced tax preparation help because they utilizes top software brands such as Creative Solutions, Lacerte, ProSeries, ATX, Drake, and other software applications which are appropriate for working with taxes and are used by CPA firms in USA. Whether you are in a partnership or working for a corporation, you can avail of the services of tax return outsourcing firms. When you are a simple homeowner, you can get preparation assistance for your Form 1040; 1040A; 1040EZ; and 1040NR. If you own a business, you can avail of tax preparation services for your Federal Forms 1120 and 1120S. The organization also offers assistance for non-profit taxes like Form 990. All state and franchise taxes are included as well.
The outsourcing tax preparation assistance of the organization is offered in two methods. One is done through remote desktop; while the other is provided through local software updates. When you opt for the first service option, you need to scan your documents and upload these to the server of the organization. Or else, you can fax the documents to a toll-free number. Then the tax prepare at outsource connects to your PC through a remote desktop application. That's it - you will be able to get the prepared tax return that you need the next day.
If you prefer the other option, which is through the local software; you have to go through the same initial step. You will have to scan your documents and have these uploaded to the secure server of the outsourcing firm. You can also choose to fax the papers to the toll-free number of the organization. The second step calls for the use of the outsourcing firms own tax preparation software licenses. Once it is done, you can just download your tax return from the secure servers with the latest updates along with the notes / open items for the prepared tax return.
There are a lot of benefits which you can get from outsourcing tax return preparation Browse online resources for outsourcing tax preparation
Article Source: http://EzineArticles.com/?expert=Amitaabh_Saboo
The idea of providing outsourced tax preparation services started about 5-6 years ago; and has become increasingly popular ever since. Recently, there have been many accounting agencies choosing to avail of an outsourcing tax preparation help for various reasons. For one, this service allows accounting agencies to reduce the costs of operation. What is more, it helps them increase the efficiency of their job. Plus, they are able to rise above the competition; what with the huge amount of assistance that they are able to offer to their own clients.
There are a lot of benefits which you can get from the outsourcing tax preparation. One of these is the chance to minimize your costs for your own tax preparation operations. You will be able to cater to the needs of your customers quickly. In turn, your customer service will improve. The normal turnaround duration of tax returns run from one to two business days. You are offered with flexible help options in order for you to comply with the specifications of your work. When you turn to a professional outsourcing firm your tax data is guaranteed to be secure and confidential.
Most reliable tax outsourcing firms capable of offering outsourced tax preparation help because they utilizes top software brands such as Creative Solutions, Lacerte, ProSeries, ATX, Drake, and other software applications which are appropriate for working with taxes and are used by CPA firms in USA. Whether you are in a partnership or working for a corporation, you can avail of the services of tax return outsourcing firms. When you are a simple homeowner, you can get preparation assistance for your Form 1040; 1040A; 1040EZ; and 1040NR. If you own a business, you can avail of tax preparation services for your Federal Forms 1120 and 1120S. The organization also offers assistance for non-profit taxes like Form 990. All state and franchise taxes are included as well.
The outsourcing tax preparation assistance of the organization is offered in two methods. One is done through remote desktop; while the other is provided through local software updates. When you opt for the first service option, you need to scan your documents and upload these to the server of the organization. Or else, you can fax the documents to a toll-free number. Then the tax prepare at outsource connects to your PC through a remote desktop application. That's it - you will be able to get the prepared tax return that you need the next day.
If you prefer the other option, which is through the local software; you have to go through the same initial step. You will have to scan your documents and have these uploaded to the secure server of the outsourcing firm. You can also choose to fax the papers to the toll-free number of the organization. The second step calls for the use of the outsourcing firms own tax preparation software licenses. Once it is done, you can just download your tax return from the secure servers with the latest updates along with the notes / open items for the prepared tax return.
There are a lot of benefits which you can get from outsourcing tax return preparation Browse online resources for outsourcing tax preparation
Article Source: http://EzineArticles.com/?expert=Amitaabh_Saboo
3/18/2008
Top Self Employed Tax Questions
What is Business Turnover? Sales turnover is the total amount of income a business earns before deducting business expenses. Turnover includes receipts of any kind for goods sold or work done such as commission, tips, payments in kind, fees and insurance proceeds. Include sales turnover in your financial accounts at the date it was invoiced or earned and not the date received.
What is excluded from Business Turnover? Sales turnover excludes sales of fixed assets such as premises, vehicles and plant and equipment. Also exclude business start up allowances which are entered separately on the self assessment tax return. Money introduced to the business is excluded being capital introduced and not sales turnover.
What business expenses are allowable? All running costs incurred solely for the purpose of the business may be deducted as allowable business expenses including goods bought for resale, employee wages, premises rent and overheads, administration costs, vehicle running costs. Interest on loans and overdrafts can be claimed as business expenses excluding the capital element of repayments. Higher business expense levels accurately recorded can keep taxable profit below the higher tax rate.
Can the cost of buying and repairing plant and machinery be claimed? Repairs and maintenance costs are allowable business expenses. The purchase cost including improvements and replacement costs are not allowable business expenses, these costs being subject instead to capital allowances. Depreciation is not allowed and replaced by Capital Allowances for the purposes of calculating the tax payable.
What are Capital Allowances? Capital allowances are designed to write off the cost of purchasing a fixed asset over the life of the asset rather than in the financial year in which it was purchased. Capital allowances on the majority of assets are based upon a higher rate of allowance in the year of purchase, First Year Allowance with the balance of the cost being written off at a lower rate, Writing Down Allowance. The full cost of any asset may be claimed as an expense in the year it is sold or scrapped less the total of accumulated capital allowances that have been claimed against taxable profits. Any sales proceeds over and above the written down value after Capital Allowances is added back to net profits and becomes taxable. Cars are subject to writing down allowances but not First Year Allowances unless they are classed as commercial vehicles. DIY Accounting produce comprehensive accounting software templates on excel spreadsheets to automate the accounting functions including capital allowances.
Is expenditure used for both personal and business reasons claimable? No. HMRC only allow such expenses if the business expenses element of the cost can be separated from the personal element. If you claim the travelling expenses to buy business goods they can be claimed for tax purposes but would be disallowed if you also showed evidence of personal items being purchased on the same journey. Using your home phone is an allowable business expense if you claim specific identified business calls in which case you would also be able to claim a similar proportion of the rental cost.
Can vehicle costs be claimed when that vehicle is also used for personal use? Vehicle running costs and expenses such as fuel, excise duty, insurance, repairs and breakdown membership may be claimed as business expenses if the vehicle is used solely for business purposes. Travel from home to work is not business use and disallowed. Vehicle running costs, and capital allowances on vehicles, are split between claimable costs and a disallowed cost depending on the proportion the vehicle is used for business and personal use. Parking fees for business purposes may be claimed, parking fines and penalties for motoring expenses are not claimable as business expenses for tax purposes. Instead of vehicle running costs which for tax purposes would include capital tax allowances on vehicles, mileage allowances of 40p per mile for the first 10,000 miles and 25p per mile thereafter can be claimed in each tax year.
Can Business trips be claimed? Travelling expenses and modest lunch expenses may be claimed. Hotel and reasonable costs of subsistence may also be claimed. If the overnight residence happens to be with friends or family then a subsistence allowance can be claimed as an alternative to the hotel bill. The cost of lunch may not be allowed when staying away overnight. Lunch with clients is regarded as entertainment and is not allowed. If you are accompanied on a business trip by family only your cost is allowable and specifically only if the trip was purely for business purposes. Expenses on combined business and personal trips are not allowed to be deducted as business expenses on tax returns.
Can home costs be claimed? If part of your home is identifiable as solely for business purposes then running costs can be claimed. The cost allowed is the proportion of the total area of the home the business area occupies. For example, excluding shared facilities of kitchen and toilet if the home has three bedrooms, living and dining room and one bedroom is used solely as an office then 1/5 of home costs could be claimed. The costs to claim would be heat and light, insurance, general and water rates and mortgage interest excluding repayment amounts. Where mortgage interest is claimed the revenue might also claim as a capital gain the increase in value of that proportion of the home, such Capital Gains Tax being subject to tapering relief over time.
Should business goods taken for my own use be included? Any business goods taken for personal use should be added to sales at normal selling prices including items supplied to family and friends at less than normal prices. He cost of providing services for family and friends is not allowable as a business expense.
Can I deduct my salary or drawings as a business expense? You cannot deduct your own wages, personal national insurance or drawings from the business as a business expense as these are distributions of the business income after net taxable profit has been calculated and not allowable expenses before tax..
Can I deduct my partner's wages? Yes partner's wages can be deducted as a business expense although there are rules which would be applied in such circumstances to ensure the amount paid is both real and reasonable. The business would need to operate a PAYE scheme for that employee, deducting income tax and national insurance, the work carried out must be real not invented and the rate paid reasonable for the nature of the work and the time spent. Evidence may also be required that the amounts were actually physically paid to that partner, for example in the form of a cheque.
Should Tax Credits be included? No these are excluded from business profits although the level of credit received may subsequently be changed in the light of the actual business profit earned compared with the amount declared when the Tax Credit was applied for. HMRC do check that the net taxable profit shown on the tax return is the same as that declared when the Tax Credit was claimed.
Can I claim expenditure incurred prior to trading commencing? Yes business expenses incurred up to seven years prior to trading commencing can be claimed. The actual date of the expenditure should be recorded although all pre-trading expenditure is treated as having been incurred on the first day of trading.
Are pool cars taxable? Company cars are taxable as a taxable benefit while pool cars are not taxable. To qualify as a pool car, private use should be incidental to business use, the vehicle should not normally be kept at the employee's home and the vehicle must be available and used by more than one employee.
Terry Cartwright is a qualified accountant in the UK and provides through his website DIY Accounting a full range of Accounting Software and Payroll Software for both small limited companies in the UK that produce a final set of accounts and all Self-employed business fully automated on excel spreadsheets to automatically produce the self assessment tax return.
Article Source: http://EzineArticles.com/?expert=Terry_Cartwright
What is excluded from Business Turnover? Sales turnover excludes sales of fixed assets such as premises, vehicles and plant and equipment. Also exclude business start up allowances which are entered separately on the self assessment tax return. Money introduced to the business is excluded being capital introduced and not sales turnover.
What business expenses are allowable? All running costs incurred solely for the purpose of the business may be deducted as allowable business expenses including goods bought for resale, employee wages, premises rent and overheads, administration costs, vehicle running costs. Interest on loans and overdrafts can be claimed as business expenses excluding the capital element of repayments. Higher business expense levels accurately recorded can keep taxable profit below the higher tax rate.
Can the cost of buying and repairing plant and machinery be claimed? Repairs and maintenance costs are allowable business expenses. The purchase cost including improvements and replacement costs are not allowable business expenses, these costs being subject instead to capital allowances. Depreciation is not allowed and replaced by Capital Allowances for the purposes of calculating the tax payable.
What are Capital Allowances? Capital allowances are designed to write off the cost of purchasing a fixed asset over the life of the asset rather than in the financial year in which it was purchased. Capital allowances on the majority of assets are based upon a higher rate of allowance in the year of purchase, First Year Allowance with the balance of the cost being written off at a lower rate, Writing Down Allowance. The full cost of any asset may be claimed as an expense in the year it is sold or scrapped less the total of accumulated capital allowances that have been claimed against taxable profits. Any sales proceeds over and above the written down value after Capital Allowances is added back to net profits and becomes taxable. Cars are subject to writing down allowances but not First Year Allowances unless they are classed as commercial vehicles. DIY Accounting produce comprehensive accounting software templates on excel spreadsheets to automate the accounting functions including capital allowances.
Is expenditure used for both personal and business reasons claimable? No. HMRC only allow such expenses if the business expenses element of the cost can be separated from the personal element. If you claim the travelling expenses to buy business goods they can be claimed for tax purposes but would be disallowed if you also showed evidence of personal items being purchased on the same journey. Using your home phone is an allowable business expense if you claim specific identified business calls in which case you would also be able to claim a similar proportion of the rental cost.
Can vehicle costs be claimed when that vehicle is also used for personal use? Vehicle running costs and expenses such as fuel, excise duty, insurance, repairs and breakdown membership may be claimed as business expenses if the vehicle is used solely for business purposes. Travel from home to work is not business use and disallowed. Vehicle running costs, and capital allowances on vehicles, are split between claimable costs and a disallowed cost depending on the proportion the vehicle is used for business and personal use. Parking fees for business purposes may be claimed, parking fines and penalties for motoring expenses are not claimable as business expenses for tax purposes. Instead of vehicle running costs which for tax purposes would include capital tax allowances on vehicles, mileage allowances of 40p per mile for the first 10,000 miles and 25p per mile thereafter can be claimed in each tax year.
Can Business trips be claimed? Travelling expenses and modest lunch expenses may be claimed. Hotel and reasonable costs of subsistence may also be claimed. If the overnight residence happens to be with friends or family then a subsistence allowance can be claimed as an alternative to the hotel bill. The cost of lunch may not be allowed when staying away overnight. Lunch with clients is regarded as entertainment and is not allowed. If you are accompanied on a business trip by family only your cost is allowable and specifically only if the trip was purely for business purposes. Expenses on combined business and personal trips are not allowed to be deducted as business expenses on tax returns.
Can home costs be claimed? If part of your home is identifiable as solely for business purposes then running costs can be claimed. The cost allowed is the proportion of the total area of the home the business area occupies. For example, excluding shared facilities of kitchen and toilet if the home has three bedrooms, living and dining room and one bedroom is used solely as an office then 1/5 of home costs could be claimed. The costs to claim would be heat and light, insurance, general and water rates and mortgage interest excluding repayment amounts. Where mortgage interest is claimed the revenue might also claim as a capital gain the increase in value of that proportion of the home, such Capital Gains Tax being subject to tapering relief over time.
Should business goods taken for my own use be included? Any business goods taken for personal use should be added to sales at normal selling prices including items supplied to family and friends at less than normal prices. He cost of providing services for family and friends is not allowable as a business expense.
Can I deduct my salary or drawings as a business expense? You cannot deduct your own wages, personal national insurance or drawings from the business as a business expense as these are distributions of the business income after net taxable profit has been calculated and not allowable expenses before tax..
Can I deduct my partner's wages? Yes partner's wages can be deducted as a business expense although there are rules which would be applied in such circumstances to ensure the amount paid is both real and reasonable. The business would need to operate a PAYE scheme for that employee, deducting income tax and national insurance, the work carried out must be real not invented and the rate paid reasonable for the nature of the work and the time spent. Evidence may also be required that the amounts were actually physically paid to that partner, for example in the form of a cheque.
Should Tax Credits be included? No these are excluded from business profits although the level of credit received may subsequently be changed in the light of the actual business profit earned compared with the amount declared when the Tax Credit was applied for. HMRC do check that the net taxable profit shown on the tax return is the same as that declared when the Tax Credit was claimed.
Can I claim expenditure incurred prior to trading commencing? Yes business expenses incurred up to seven years prior to trading commencing can be claimed. The actual date of the expenditure should be recorded although all pre-trading expenditure is treated as having been incurred on the first day of trading.
Are pool cars taxable? Company cars are taxable as a taxable benefit while pool cars are not taxable. To qualify as a pool car, private use should be incidental to business use, the vehicle should not normally be kept at the employee's home and the vehicle must be available and used by more than one employee.
Terry Cartwright is a qualified accountant in the UK and provides through his website DIY Accounting a full range of Accounting Software and Payroll Software for both small limited companies in the UK that produce a final set of accounts and all Self-employed business fully automated on excel spreadsheets to automatically produce the self assessment tax return.
Article Source: http://EzineArticles.com/?expert=Terry_Cartwright
3/17/2008
Domain Tax Guide
Use this comprehensive checklist to plan each step of your new business and transform your dream of entrepreneurship into reality. These steps may not necessarily be completed in the order listed; however, you can use them as a guideline for completing all of the necessary business startup tasks. - Determine what kind of business you want to start. - Learn about the industry for your business. - Analyze the market for your business. - Study your competition. - Educate yourself on running a business. - Join trade associations. - Name your business. - Perform a trademark search. - Register a domain name. - Design a website. - Obtain a logo. - Determine business structure (sole proprietor, partnership, or corporation). - Evaluate your personal budget. - Write a business plan. - Write a marketing plan. - Locate financing. - Create a list of start-up supplies with budget. - Set up a system for accounting and payroll. - Apply for business license, fed tax ID, fictitious business name. - Select a location and set up shop. - Order signage. - Obtain business tools (computer, printer, fax, postage, office supplies, and fixtures). - Order business stationery (business cards, letterhead, brochures). - Obtain inventory. - Create an operations and employee manual. - Hire employees. - Set a launch date. - Plan a grand opening event. - Send announcements to everyone you know. - Send press releases. - Turn on the OPEN sign! - Revisit your business plan and update often. - Evaluate your marketing strategy often. - Prepare a realistic business plan. Think of this as your business road map. Define exactly where you want to get to with your business and then you can effectively map out your path towards achieving your goals! By creating a detailed business plan you should cover all options and eventualities and have a clear future vision that will guide you through the rest of the start-up processes. - Your business plan should encompass the financial considerations of starting your small or home based business:- Do you have the capital required? Do you need to raise additional funds? Who are you going to approach for finance? Who do you trust for advice? And don't forget to open a business bank account… - Consider the legal implications of becoming a business owner and proprietor. Are you better off as a sole trader, a limited company or are you considering a partnership? Make sure you consider all the angles and protect yourself and your assets personally from the outset. Anything you bring to the business has to be itemized, valued…even if you're a sole trader. And make sure you are professionally covered with the appropriate business indemnity insurances. - Get your family and friends behind you from the get-go. Make sure your family and friends are fully understanding and supportive of your ideas to venture into small business start-up. Do they understand the level of commitment you will have to show for on-going and long term success? Their belief in you and continued support of you will work wonders towards your on-going success, so don't forget to look out for them too. - Protect your family, protect your business. If, God forbid, something were to happen to your health, how would your business survive, how would your family cope? Consider insurances - from health, critical illness and income protection insurance to life insurance - and consider your pension and long term financial security. - Face those 'taxing' questions from the start. Your small or home based business has to consider its taxation situation. Do you need to register your business for sales tax purposes; have you informed your tax office of your business's inauguration? Do you have a good tax professional lined up to guide and assist you? The bottom line when it comes to taxation is that from the outset you need to make sure your papers and books are in order, this will save you time, money and heart ache in the long run. - Prepare realistic and achievable goals and targets for your first year. Do not expect to conquer the world with your first year's business returns. Starting a business is a life changing undertaking and one you must be patient with. The rewards are there, but make sure you set yourself achievable targets - when you reach them they will give you the confidence and satisfaction to set new goals and to continue building your business' success.
Article Source: http://www.goarticles.com/cgi-bin/showa.cgi?C=799553
Article Source: http://www.goarticles.com/cgi-bin/showa.cgi?C=799553
3/16/2008
Roth IRA or Traditional IRA-Which is Best?
First, you should determine if you are qualified to contribute to either. You may contribute to either traditional or Roth IRAs only to the extent you have earned income includible in gross income. The maximum contribution for a taxpayer and the taxpayer’s spouse is $4,000 each. Individuals who are at least age 50 will be able to make an additional contribution of $500 ($1,000 for 2006). You have until April 17th, 2006 to make an IRA contribution for the 2005 tax year. You must be less than age 70 ½ to purchase a traditional IRA.
In addition to the $4,000 limit mentioned above, contributions to traditional IRAs can be further limited when the individual (or spouse) is an active participant in a retirement plan maintained by an employer. The maximum deductible IRA contribution for an individual who is not an active participant, but whose spouse is an active participant, is phased out when modified adjusted gross income is between $150,000 and $160,000.
The maximum deduction for an individual who is an active participant in a retirement plan is phased out when modified adjusted gross income is between ($50,000 to $60,000 for single and head of household; $0 to $10,000 for married filing separate).
When both spouses are active participants in an employer sponsored retirement plan, tax deductible contributions are phased out when modified adjusted gross income is between $70,000 and $80,000. If your tax deduction is limited by the active participation rules, look to the Roth rules.
Roth IRAs are not subject to the active participation rules. However, contributions to Roth IRAs are phased out when income exceeds the thresholds. Contributions made by single filers are phased out when modified adjusted gross income is between $95,000 and $110,000, and for joint filers with modified adjusted gross income between $150,000 and $160,000, and for married filing separately with modified adjusted gross income between 0 and $10,000.
Roth and traditional IRAs also have different distribution rules, which goes beyond the scope of this article.
So if you qualify for both traditional and Roth, and you are not concerned with the different distribution rules, what is best?
With traditional IRAs, you get an immediate tax deduction. Tax on your contribution is deferred until final distribution. Also, all earnings inside your traditional IRA grow tax deferred. Roth IRAs offer no immediate deduction. However, all earnings inside your Roth IRA grow tax free, not tax deferred.
Therefore, you must consider what tax bracket you are in now and what tax bracket you will be in when you receive the distributions. If you are in the 10 or 15 percent tax brackets, Roth may be a good choice. Based on a $4,000 contribution, you are bypassing immediate tax reduction of $400 to $600 in exchange for a lifetime of tax free accumulation on your $4,000 investment. This option looks even stronger if you expect to be in a higher tax bracket when you finally distribute your accumulation.
On the other hand, if you are in the 35 percent tax bracket, a Roth election means bypassing $1,400 immediate tax reduction (on a $4,000 contribution). If you expect to be in a lower tax bracket when you finally distribute your investment, as many retirees are, it makes sense to contribute to a traditional IRA and get an immediate tax break.
Tax accountant John Huddleston has a law degree and masters in tax law from the University of Washington School of Law. He has been a guest tax expert on the radio. He advises small businesses in the Seattle Bellevue Kent Everett area on various tax issues and provides tax preparation. Seattle Bellevue tax accountant John Huddleston is a frequent publisher of tax saving ideas.
Article Source: http://EzineArticles.com/?expert=John_Huddleston
In addition to the $4,000 limit mentioned above, contributions to traditional IRAs can be further limited when the individual (or spouse) is an active participant in a retirement plan maintained by an employer. The maximum deductible IRA contribution for an individual who is not an active participant, but whose spouse is an active participant, is phased out when modified adjusted gross income is between $150,000 and $160,000.
The maximum deduction for an individual who is an active participant in a retirement plan is phased out when modified adjusted gross income is between ($50,000 to $60,000 for single and head of household; $0 to $10,000 for married filing separate).
When both spouses are active participants in an employer sponsored retirement plan, tax deductible contributions are phased out when modified adjusted gross income is between $70,000 and $80,000. If your tax deduction is limited by the active participation rules, look to the Roth rules.
Roth IRAs are not subject to the active participation rules. However, contributions to Roth IRAs are phased out when income exceeds the thresholds. Contributions made by single filers are phased out when modified adjusted gross income is between $95,000 and $110,000, and for joint filers with modified adjusted gross income between $150,000 and $160,000, and for married filing separately with modified adjusted gross income between 0 and $10,000.
Roth and traditional IRAs also have different distribution rules, which goes beyond the scope of this article.
So if you qualify for both traditional and Roth, and you are not concerned with the different distribution rules, what is best?
With traditional IRAs, you get an immediate tax deduction. Tax on your contribution is deferred until final distribution. Also, all earnings inside your traditional IRA grow tax deferred. Roth IRAs offer no immediate deduction. However, all earnings inside your Roth IRA grow tax free, not tax deferred.
Therefore, you must consider what tax bracket you are in now and what tax bracket you will be in when you receive the distributions. If you are in the 10 or 15 percent tax brackets, Roth may be a good choice. Based on a $4,000 contribution, you are bypassing immediate tax reduction of $400 to $600 in exchange for a lifetime of tax free accumulation on your $4,000 investment. This option looks even stronger if you expect to be in a higher tax bracket when you finally distribute your accumulation.
On the other hand, if you are in the 35 percent tax bracket, a Roth election means bypassing $1,400 immediate tax reduction (on a $4,000 contribution). If you expect to be in a lower tax bracket when you finally distribute your investment, as many retirees are, it makes sense to contribute to a traditional IRA and get an immediate tax break.
Tax accountant John Huddleston has a law degree and masters in tax law from the University of Washington School of Law. He has been a guest tax expert on the radio. He advises small businesses in the Seattle Bellevue Kent Everett area on various tax issues and provides tax preparation. Seattle Bellevue tax accountant John Huddleston is a frequent publisher of tax saving ideas.
Article Source: http://EzineArticles.com/?expert=John_Huddleston
3/15/2008
Tips for Filing Your Taxes Early
Are you expecting a refund on your 2007 taxes? If so, then you probably want to file as soon as you possibly can in order to get the money back as quickly as possible. This is quite normal, but if you want to file as soon as you can then you will want to get organized now. For example, tax filing requires that you have all of your financial information close by. Since you will need this information, you should go ahead and create a tax file. Tax preparation of this nature will keep you prepared and allow you to easily file your taxes when the time comes.
The things you need to keep in this file folder include receipts and things of that nature if you will be itemizing your taxes. You will also want to keep track of your expenses, mileage, doctor's visits, student loan interest, rental income, and the like when you are preparing your taxes for your free efile. You will find that you are much happier when it comes time to file because you have everything you could possibly need located in your tax file folder. So, when a question is asked you can find the information and answer it within moments. This is the best way to save time when it comes to efiling.
Remember, that you can have a tax file folder you use all year long. Then, when you have qualifying expenses, charitable donations, or the like, you simply add the information to your file folder and it will sit there waiting for you. That way, when you need this information you will have it and you will be so relieved that you can claim all of your exemptions because you have all of the information located close by to claim. You will also love the fact that you can file your taxes early simply because you were organized and kept all of your tax information in one convenient location. If you get into the practice of this then every single year you will be able to file your taxes early and receive your tax refund early, too. There is no reason to get all caught up in the rush to file your taxes on the very last day when you could easily keep up with your tax information all year long and then simply pull it out when filing time comes. This will save you a lot of stress as well as time looking for documents so give it a try. You will find it is not so difficult to keep up with a tax folder and that it really is a great idea.
Caitlina Fuller is a freelance writer. If you want to file as soon as you can then you will want to get organized now. For example, tax filing requires that you have all of your financial information close by. Since you will need this information, you should go ahead and create a tax file. Tax preparation of this nature will keep you prepared and allow you to easily file your taxes when the time comes.
Article Source: http://EzineArticles.com/?expert=Caitlina_Fuller
The things you need to keep in this file folder include receipts and things of that nature if you will be itemizing your taxes. You will also want to keep track of your expenses, mileage, doctor's visits, student loan interest, rental income, and the like when you are preparing your taxes for your free efile. You will find that you are much happier when it comes time to file because you have everything you could possibly need located in your tax file folder. So, when a question is asked you can find the information and answer it within moments. This is the best way to save time when it comes to efiling.
Remember, that you can have a tax file folder you use all year long. Then, when you have qualifying expenses, charitable donations, or the like, you simply add the information to your file folder and it will sit there waiting for you. That way, when you need this information you will have it and you will be so relieved that you can claim all of your exemptions because you have all of the information located close by to claim. You will also love the fact that you can file your taxes early simply because you were organized and kept all of your tax information in one convenient location. If you get into the practice of this then every single year you will be able to file your taxes early and receive your tax refund early, too. There is no reason to get all caught up in the rush to file your taxes on the very last day when you could easily keep up with your tax information all year long and then simply pull it out when filing time comes. This will save you a lot of stress as well as time looking for documents so give it a try. You will find it is not so difficult to keep up with a tax folder and that it really is a great idea.
Caitlina Fuller is a freelance writer. If you want to file as soon as you can then you will want to get organized now. For example, tax filing requires that you have all of your financial information close by. Since you will need this information, you should go ahead and create a tax file. Tax preparation of this nature will keep you prepared and allow you to easily file your taxes when the time comes.
Article Source: http://EzineArticles.com/?expert=Caitlina_Fuller
3/13/2008
Tax Credits for Energy Efficient Air Conditioning In Your Home
The government often tries to influence our behavior through taxes. The tax credit for new energy efficient cooling systems in our homes is one example.
As part of the provisions in the Energy Policy Act 2005, homeowners are entitled to claim tax credits on use of a few energy saving items. They include the use of energy saving windows, doors, roofing, furnace and boiler, water heater and air conditioner. As energy becomes scarcer by the day, it is essential to conserve as much energy as possible. The government, by way of giving tax credits, also encourages using alternate sources of energy.
Using energy efficient air conditioning systems is one of the items that qualify for tax credit. Individuals who install this type of air conditioner are eligible for a tax credit of up to $300. The models that qualify are obviously costlier than the ordinary ones. However, this calculation would show that it is advisable to install a new energy saving air conditioner. Even if you save just $10 a month on average by way of electricity bills it comes to $120 for a year. Add to that the tax credit of $300, your net saving is $420. This amount should be good enough to prod a homeowner into buying an energy efficient air-conditioner.
Of course, not all air conditioners are eligible for a tax credit. Even, not all Energy Star air conditioners qualify, only some do. Very efficient central air conditioners qualify for the tax credit if they meet the following criteria:
1. The Energy Efficiency Ratio has to be 13.0 or higher (in some states its 12.5).
2. Certified technician needs to install the equipment.
3. The Seasonal Energy Efficiency Ratio (SEER) has to be 15.
SEER measures performance throughout the season and EER measures performance on a very hot day. Central Air conditioning systems must meet the standards set by the Consortium of Energy Efficiency (CEE). The specifications for each state vary slightly.
The tax credit for energy efficient cooling systems in our home is just another step in saving money on both your energy bill and taxes. Since tax credits are reduced from the actual amount of tax you owe, not your gross income, you should strongly consider taking advantage of this one.
Richard A. Chapo is with Business Tax Recovery - providing information on taxes.
Article Source: http://EzineArticles.com/?expert=Richard_Chapo
As part of the provisions in the Energy Policy Act 2005, homeowners are entitled to claim tax credits on use of a few energy saving items. They include the use of energy saving windows, doors, roofing, furnace and boiler, water heater and air conditioner. As energy becomes scarcer by the day, it is essential to conserve as much energy as possible. The government, by way of giving tax credits, also encourages using alternate sources of energy.
Using energy efficient air conditioning systems is one of the items that qualify for tax credit. Individuals who install this type of air conditioner are eligible for a tax credit of up to $300. The models that qualify are obviously costlier than the ordinary ones. However, this calculation would show that it is advisable to install a new energy saving air conditioner. Even if you save just $10 a month on average by way of electricity bills it comes to $120 for a year. Add to that the tax credit of $300, your net saving is $420. This amount should be good enough to prod a homeowner into buying an energy efficient air-conditioner.
Of course, not all air conditioners are eligible for a tax credit. Even, not all Energy Star air conditioners qualify, only some do. Very efficient central air conditioners qualify for the tax credit if they meet the following criteria:
1. The Energy Efficiency Ratio has to be 13.0 or higher (in some states its 12.5).
2. Certified technician needs to install the equipment.
3. The Seasonal Energy Efficiency Ratio (SEER) has to be 15.
SEER measures performance throughout the season and EER measures performance on a very hot day. Central Air conditioning systems must meet the standards set by the Consortium of Energy Efficiency (CEE). The specifications for each state vary slightly.
The tax credit for energy efficient cooling systems in our home is just another step in saving money on both your energy bill and taxes. Since tax credits are reduced from the actual amount of tax you owe, not your gross income, you should strongly consider taking advantage of this one.
Richard A. Chapo is with Business Tax Recovery - providing information on taxes.
Article Source: http://EzineArticles.com/?expert=Richard_Chapo
3/12/2008
Practical Tips for Filing Taxes Online
Tax season can be a very stressful time for many people. It can be frustrating trying to understand complex tax codes, deductions and earned income credit. Some people become so intimidated by their taxes that they simply chose to ignore them. Although this can be a tempting solution, it is never the right answer.
With a little common sense, a calculator, a few hours and a pot of coffee, you can file your own taxes from the comfort of your own home with very little stress. It is really not as difficult as you think and can actually have quite a few advantages.
The first thing you should do is decide how you will be filing your taxes. Will you file taxes online? Will you go to an accountant? Perhaps you will use the free e-file programs that are available. Filing taxes online is rapidly becoming the most common way of filing taxes. Even if you go see a tax professional, they are likely to file your taxes online because the process is quicker. In addition, those who file online typically receive a refund quicker than those who file through regular mail. Many tax preparation software packages include the option of storing your information from last tax season which allows you to quickly complete information that hasn’t changed.
There are some things to remember when filing your taxes online. First, you will want to read your W-2. Find out what each of those boxes mean and be sure to read the back of your W-2 as well before you begin. You will want to print out copies of your tax forms, even when you file them online, for your records. Most online filing services will provide you with a confirmation that the IRS has received your taxes. You will want to print that out as well.
Online tax filing programs typically will offer tax advice as you work through the programs. It is a good idea to go through the tax information that is given, even if you do not think it applies to you. You might be surprised by something you are able to deduct or an additional credit you are able to claim. That is one advantage of opting to file taxes online.
The IRS website, in addition to offering a tremendous amount of tax information, will provide you with different options you have to file taxes for free. There are different criteria for each organization that files taxes for free. You will most likely be able to find one that applies to you. There are also many tax preparers that will file your taxes online for free if you pay them to prepare your taxes for you. Many commercial software packages allow you to file online for free as well. Once you purchase the software, you can file your federal taxes for no additional cost. Some programs will allow you to file taxes for free in your particular state. Others charge an additional fee.
Filing your taxes online can eliminate a lot of the stress from taxes. The programs have error checkers and calculators built in so you have a much smaller chance of making an error. With so many options to file for free, it is no wonder that many Americans are choosing this route to file their taxes.
Natalie Aranda writes on business and finance. Tax season can be a very stressful time for many people. It can be frustrating trying to understand complex tax codes, deductions and earned income credit. Some people become so intimidated by their taxes that they simply chose to ignore them. Although this can be a tempting solution, it is never the right answer. The first thing you should do is decide how you will be filing your taxes. Will you file taxes online? Will you go to an accountant? Perhaps you will use the free e-file programs that are available. Filing taxes online is rapidly becoming the most common way of filing taxes. Even if you go see a tax professional, they are likely to file your taxes online because the process is quicker.
Article Source: http://EzineArticles.com/?expert=Natalie_Aranda
With a little common sense, a calculator, a few hours and a pot of coffee, you can file your own taxes from the comfort of your own home with very little stress. It is really not as difficult as you think and can actually have quite a few advantages.
The first thing you should do is decide how you will be filing your taxes. Will you file taxes online? Will you go to an accountant? Perhaps you will use the free e-file programs that are available. Filing taxes online is rapidly becoming the most common way of filing taxes. Even if you go see a tax professional, they are likely to file your taxes online because the process is quicker. In addition, those who file online typically receive a refund quicker than those who file through regular mail. Many tax preparation software packages include the option of storing your information from last tax season which allows you to quickly complete information that hasn’t changed.
There are some things to remember when filing your taxes online. First, you will want to read your W-2. Find out what each of those boxes mean and be sure to read the back of your W-2 as well before you begin. You will want to print out copies of your tax forms, even when you file them online, for your records. Most online filing services will provide you with a confirmation that the IRS has received your taxes. You will want to print that out as well.
Online tax filing programs typically will offer tax advice as you work through the programs. It is a good idea to go through the tax information that is given, even if you do not think it applies to you. You might be surprised by something you are able to deduct or an additional credit you are able to claim. That is one advantage of opting to file taxes online.
The IRS website, in addition to offering a tremendous amount of tax information, will provide you with different options you have to file taxes for free. There are different criteria for each organization that files taxes for free. You will most likely be able to find one that applies to you. There are also many tax preparers that will file your taxes online for free if you pay them to prepare your taxes for you. Many commercial software packages allow you to file online for free as well. Once you purchase the software, you can file your federal taxes for no additional cost. Some programs will allow you to file taxes for free in your particular state. Others charge an additional fee.
Filing your taxes online can eliminate a lot of the stress from taxes. The programs have error checkers and calculators built in so you have a much smaller chance of making an error. With so many options to file for free, it is no wonder that many Americans are choosing this route to file their taxes.
Natalie Aranda writes on business and finance. Tax season can be a very stressful time for many people. It can be frustrating trying to understand complex tax codes, deductions and earned income credit. Some people become so intimidated by their taxes that they simply chose to ignore them. Although this can be a tempting solution, it is never the right answer. The first thing you should do is decide how you will be filing your taxes. Will you file taxes online? Will you go to an accountant? Perhaps you will use the free e-file programs that are available. Filing taxes online is rapidly becoming the most common way of filing taxes. Even if you go see a tax professional, they are likely to file your taxes online because the process is quicker.
Article Source: http://EzineArticles.com/?expert=Natalie_Aranda
3/11/2008
Tax Free Annuities
People who work for non-profit and tax exempt organizations are just like any other employee in the sense that they also need to secure their future, especially during their retirement, by investing in insurance plans and retirement plans. However, these people are different from you and me because instead of the usual 401K plan that we contribute to, they contribute to a 403B plan, which is a retirement plan that is designed for employees of tax exempt organizations. Moreover, this kind of plan allows people to invest in an annuity, which can provide other benefits apart from providing a source of income during their retirement. This is because this kind of retirement plan is also a 'tax-free' type of annuity.
How does it work?
The other name for this kind of retirement plan is a tax-sheltered annuity whereby a fixed amount of money is deducted from you paycheck, prior to taxes, as contributions to the retirement plan. With this kind of annuity, the taxes on the earnings of the retirement plan are deferred up until the people who contribute to them decide to take money from it. This means that the investment on these retirement plans can grow much faster than a traditional savings account because the tax-free interest that the plan earns can accumulate over time, providing a higher income in retirement. This income would consist not only of the interest or the earnings that the retirement plan would earn but also the principal amount, which is also protected in this kind of annuity.
However, in recent years, tax-sheltered annuities have also been made available to people who do not work for tax-exempt organizations, allowing more people to reap the benefits of having the tax payments on their earnings from these investment plans deferred. If organizations are interested in setting up a tax-sheltered annuity for their employees, one of the best sources of information on them is the Internet, which can lead them to the different financial institutions that offer them.
In the same way that most people plan for their retirement by investing in retirement plans, people who work for tax-exempt organizations also do so to secure their future. For these people, the most common retirement plan that they invest in is the tax-sheltered annuity, which renders the earnings they get from the plan to be tax-free, given that tax payments on these earnings are deferred. Given this, people who work for tax-exempt organizations are now given the chance to grow their savings faster compared to investing money in other retirement plans.
Annuity Buyer provides detailed information on Structured Settlement Annuity Buyer, Annuity Buyer, Annuity Buyer Payments, Annuity Buyer Guides and more. Annuity Buyer is affiliated with Condos For Sale.
Article Source: http://EzineArticles.com/?expert=Thomas_Morva
How does it work?
The other name for this kind of retirement plan is a tax-sheltered annuity whereby a fixed amount of money is deducted from you paycheck, prior to taxes, as contributions to the retirement plan. With this kind of annuity, the taxes on the earnings of the retirement plan are deferred up until the people who contribute to them decide to take money from it. This means that the investment on these retirement plans can grow much faster than a traditional savings account because the tax-free interest that the plan earns can accumulate over time, providing a higher income in retirement. This income would consist not only of the interest or the earnings that the retirement plan would earn but also the principal amount, which is also protected in this kind of annuity.
However, in recent years, tax-sheltered annuities have also been made available to people who do not work for tax-exempt organizations, allowing more people to reap the benefits of having the tax payments on their earnings from these investment plans deferred. If organizations are interested in setting up a tax-sheltered annuity for their employees, one of the best sources of information on them is the Internet, which can lead them to the different financial institutions that offer them.
In the same way that most people plan for their retirement by investing in retirement plans, people who work for tax-exempt organizations also do so to secure their future. For these people, the most common retirement plan that they invest in is the tax-sheltered annuity, which renders the earnings they get from the plan to be tax-free, given that tax payments on these earnings are deferred. Given this, people who work for tax-exempt organizations are now given the chance to grow their savings faster compared to investing money in other retirement plans.
Annuity Buyer provides detailed information on Structured Settlement Annuity Buyer, Annuity Buyer, Annuity Buyer Payments, Annuity Buyer Guides and more. Annuity Buyer is affiliated with Condos For Sale.
Article Source: http://EzineArticles.com/?expert=Thomas_Morva
3/10/2008
Federal Payroll Tax
The authority over federal payroll tax in the United States is the Internal Revenue Service (IRS that determines the percentage of payroll tax withheld from an employee's wages, the formalities to be fulfilled by an employer and any other issues relating to federal social security, Medicare and unemployment taxes.
Federal payroll tax withheld from an employee's wages and paid by the employer includes federal social security tax and federal Medicare taxes. This is a mandatory government extraction from your check on every payday. The federal payroll tax also includes the Federal Unemployment tax that has to be paid by the employer. Medicare and social security federal taxes have to be equally divided with the employer and employees. Social security is taxed at 6.2% currently and Medicare at 1.45% currently in the United States.
Every organization and every employer must report to the Internal Revenue Service for the federal payroll tax. As an employer, your obligations for federal payroll tax are many. The first step is to get an Employer Identification Number (EIN), by filling out form SS-4 and applying for it at the local office of the IRS. Each employee then needs to fill out form W-4 for the employer. This procedure has to be followed by both full time and part time employees in your organization. In case the employee has not submitted this form, taxes will be withheld from the wages of an employee without taking into consideration dependants. This is because the amount withheld is based on the marital status of the employee and the number of dependants. Once done, the federal payroll tax is calculated according to the current rates and submitted to the local IRS office.
More information on federal payroll taxes can be found at the IRS Publication 15, Circular E.
Payroll Tax provides detailed information on Payroll Tax, Federal Payroll Tax, Payroll Tax Calculators, How to Calculate Payroll Tax and more. Payroll Tax is affiliated with Payroll Software.
Article Source: http://EzineArticles.com/?expert=Seth_Miller
Federal payroll tax withheld from an employee's wages and paid by the employer includes federal social security tax and federal Medicare taxes. This is a mandatory government extraction from your check on every payday. The federal payroll tax also includes the Federal Unemployment tax that has to be paid by the employer. Medicare and social security federal taxes have to be equally divided with the employer and employees. Social security is taxed at 6.2% currently and Medicare at 1.45% currently in the United States.
Every organization and every employer must report to the Internal Revenue Service for the federal payroll tax. As an employer, your obligations for federal payroll tax are many. The first step is to get an Employer Identification Number (EIN), by filling out form SS-4 and applying for it at the local office of the IRS. Each employee then needs to fill out form W-4 for the employer. This procedure has to be followed by both full time and part time employees in your organization. In case the employee has not submitted this form, taxes will be withheld from the wages of an employee without taking into consideration dependants. This is because the amount withheld is based on the marital status of the employee and the number of dependants. Once done, the federal payroll tax is calculated according to the current rates and submitted to the local IRS office.
More information on federal payroll taxes can be found at the IRS Publication 15, Circular E.
Payroll Tax provides detailed information on Payroll Tax, Federal Payroll Tax, Payroll Tax Calculators, How to Calculate Payroll Tax and more. Payroll Tax is affiliated with Payroll Software.
Article Source: http://EzineArticles.com/?expert=Seth_Miller
3/09/2008
Texas Sales Tax Facts
You might have reasons to concern yourself with Texas sales tax. For some, just the thought of figuring out tax laws alone can cause some minor anxiety. However, there is still a need to find out about them, in order not to get into any unnecessary trouble. If you are seeking information specifically relating to the sales tax in Texas, here are some important facts you may have to know about.
Like many other states, Texas runs its own tax rules. Its sales tax is a combination of the basic sales tax, and the use tax plus other government levies. That puts the sales tax for Texas at around 8.25%.
There are also exemptions to the sales taxes in Texas. These include medications, bakeries, meats and some other food items.
It should be noted though that items that have been purchased outside of the state and taken in are slapped with a corresponding use tax. This is vastly different from many other states, where products brought from outside are not taxed. If you live in Texas, you should also remember to pay the use tax when applicable. Otherwise you might have to deal with a steeper fine.
There are also exemptions to the use tax, though. Examples of these items are some of those that are used during the filming of movies or shows. Film cameras and some of their accompanying parts may not be taxed. In the mean time, however, a great many other objects and items that are part of a motion picture production may be taxed. This can include anything from props, tools, tables, chairs and cars.
From the look of it, sales tax and use tax rules in Texas can be quite baffling. It can take you a lot of time figuring out the rules. When you do figure them out, there is a chance that you could have interpreted them incorrectly. You can help avoid a sales tax mess by not doing things on your own. As in any state, there are tax experts in Texas that you can consult or hire for a fee. Depending on your own knowledge and ability, you can pay for someone's help whether you just want to ask a tax question or let him do all the dirty work.
If you choose not to retain the regular service of a tax expert, you will have to continually look out for yourself. This can be tricky because sales tax laws can vary over the time. Usually, notices will be sent or posted when a change occurs., and you should pay close attention and not to miss any sales tax change announcement.
Like many other tax policies, Texas sales tax may seem tricky. It is however your duty to learn about and keep track of them. It could be costly for you if you make errors in sales tax computations.
It is not just Tesax sales tax that has its uniqueness. If you wish to explore more about sales taxes, be sure you check out our free online guide. You may also like to visit our main online tax help for a wide range of tax information.
Article Source: http://EzineArticles.com/?expert=Brenda_Lee
Like many other states, Texas runs its own tax rules. Its sales tax is a combination of the basic sales tax, and the use tax plus other government levies. That puts the sales tax for Texas at around 8.25%.
There are also exemptions to the sales taxes in Texas. These include medications, bakeries, meats and some other food items.
It should be noted though that items that have been purchased outside of the state and taken in are slapped with a corresponding use tax. This is vastly different from many other states, where products brought from outside are not taxed. If you live in Texas, you should also remember to pay the use tax when applicable. Otherwise you might have to deal with a steeper fine.
There are also exemptions to the use tax, though. Examples of these items are some of those that are used during the filming of movies or shows. Film cameras and some of their accompanying parts may not be taxed. In the mean time, however, a great many other objects and items that are part of a motion picture production may be taxed. This can include anything from props, tools, tables, chairs and cars.
From the look of it, sales tax and use tax rules in Texas can be quite baffling. It can take you a lot of time figuring out the rules. When you do figure them out, there is a chance that you could have interpreted them incorrectly. You can help avoid a sales tax mess by not doing things on your own. As in any state, there are tax experts in Texas that you can consult or hire for a fee. Depending on your own knowledge and ability, you can pay for someone's help whether you just want to ask a tax question or let him do all the dirty work.
If you choose not to retain the regular service of a tax expert, you will have to continually look out for yourself. This can be tricky because sales tax laws can vary over the time. Usually, notices will be sent or posted when a change occurs., and you should pay close attention and not to miss any sales tax change announcement.
Like many other tax policies, Texas sales tax may seem tricky. It is however your duty to learn about and keep track of them. It could be costly for you if you make errors in sales tax computations.
It is not just Tesax sales tax that has its uniqueness. If you wish to explore more about sales taxes, be sure you check out our free online guide. You may also like to visit our main online tax help for a wide range of tax information.
Article Source: http://EzineArticles.com/?expert=Brenda_Lee
3/08/2008
Small Business Tax Tips
Small Business Tax Tips
Any small business owner knows that they may live or die by the financial decisions that they make. While many cut corners by making prudent purchase decisions, few realize the opportunities that are available to them when it comes to working out the taxes for their business. In this article, we'll give you some tips to help you realize the best ways to optimize your taxes.
- One interesting write-off that many small business owners fail to realize is their health insurance. The taxing laws dictate that self employed people may write off a full sixty percent of their health insurance costs, saving them potentially thousands of dollars. In addition, medical savings accounts can be set up and the contributions made up until April 17th are considered by the IRS.
- When considering employees for your business, think family first. If there are people in your family that can help you to operate the business, you can allow them to take on some of the income of the business, allowing you to put your earnings into lower tax brackets, assuming the relative performs some type of service to the business.
- Another aspect often neglected by uninformed small business owners is the prospect of a retirement fund. You can contribute to a qualified self retirement fund which is completely tax deductible in your returns.
- The first year expense limitation for any small business is now $19,000. Don't forget to write off any business-related practices, including taking potential clients to lunch, or golfing, or whatever situation may merit as an expense. One technique often employed when it comes to lessening the taxes that you face is to buy supplies that you know that the office will need in the coming year early so that you can write them off. While it's not a permanent solution, it can defer the damage your taxes do to you.
Keeping track of your financial records and keeping a clear separation between expenses made for yourself and those made for your business can really ease your struggle come tax time. Being organized and having a plan can save you both time and all-important money.
Jonathon Hardcastle writes articles on many topics including Business, Society, and Investing.
Article Source: http://EzineArticles.com/?expert=Jonathon_Hardcastle
Any small business owner knows that they may live or die by the financial decisions that they make. While many cut corners by making prudent purchase decisions, few realize the opportunities that are available to them when it comes to working out the taxes for their business. In this article, we'll give you some tips to help you realize the best ways to optimize your taxes.
- One interesting write-off that many small business owners fail to realize is their health insurance. The taxing laws dictate that self employed people may write off a full sixty percent of their health insurance costs, saving them potentially thousands of dollars. In addition, medical savings accounts can be set up and the contributions made up until April 17th are considered by the IRS.
- When considering employees for your business, think family first. If there are people in your family that can help you to operate the business, you can allow them to take on some of the income of the business, allowing you to put your earnings into lower tax brackets, assuming the relative performs some type of service to the business.
- Another aspect often neglected by uninformed small business owners is the prospect of a retirement fund. You can contribute to a qualified self retirement fund which is completely tax deductible in your returns.
- The first year expense limitation for any small business is now $19,000. Don't forget to write off any business-related practices, including taking potential clients to lunch, or golfing, or whatever situation may merit as an expense. One technique often employed when it comes to lessening the taxes that you face is to buy supplies that you know that the office will need in the coming year early so that you can write them off. While it's not a permanent solution, it can defer the damage your taxes do to you.
Keeping track of your financial records and keeping a clear separation between expenses made for yourself and those made for your business can really ease your struggle come tax time. Being organized and having a plan can save you both time and all-important money.
Jonathon Hardcastle writes articles on many topics including Business, Society, and Investing.
Article Source: http://EzineArticles.com/?expert=Jonathon_Hardcastle
3/07/2008
Tax Relief For Foreclosures
On December 20, 2007 President Bush signed the Mortgage Forgiveness Debt Relief Act of 2007. The new law passed and has received a substantial amount of press, because of the mortgage credit crisis and the tremendous growth in foreclosures in 2007. It offers some income Tax Relief to homeowners who are unable to pay their mortgage liabilities.
The general rule of law is that a forgiveness of debt results in taxable income to the person owing the debt. The example that everyone has recently become familiar with is the homeowner who cannot afford to keep up his mortgage payments, but who cannot sell the house for enough to pay off the mortgage. Such individuals some times negotiate with their mortgage company what is called a "short sale. " In a short sale a mortgage company agrees to accept what the homeowner can get for selling the house in full satisfaction of the mortgage. For example if a mortgage balance is $200,000.00, and the house will only sell for $180,000.00 the mortgage company may agree to accept $165,000.00 (this example assumes that the cost of selling the house such as realtor fees, transfer taxes and title insurance adds up to $15,000.00).
In this short sale example the mortgage company will lose $35,000.00 and will agree not to pursue the homeowner for the deficiency. The mortgage company accepts the deal, because they would have lost more money in a foreclosure proceeding. Although the homeowner walks away with nothing, he or she accepts the deal, because she can avoid owing the balance of the mortgage debt that the sale failed to pay off.
Unfortunately the seller of the property who has just lost his home will have $35,000.00 of taxable income. Furthermore, many people entering short sales are not aware of this law, and they only discover their liability, when they receive a letter from the IRS informing them that they failed to pay thousands of dollars of taxes, penalties and interest on their tax returns.
The Mortgage Forgiveness Debt Relief Act of 2007 does remove the tax liability for people going through home foreclosures and short sales, although the law fails to cover all situations. For one thing the act is a temporary law. It only covers the three year period of 2007 thru 2009. Furthermore, it only covers home acquisition financing, not home equity financing.
Example. Harry Hedger buys a house in 2004 for $250,000.00 with no money down. In 2006 he refinances the home for $300,000.00; so he may take advantage of a hot stock market tip. Unfortunately, the stock investment turns South, and in 2007 he sells his home in a short sale which nets $230,000.00 to the mortgage company. Harry's debt forgiveness is $70,000.00. $20,000.00 of this amount will be tax free, because it is home acquisition indebtedness, but he will still have $50,000.00 of taxable income.
Finally, the new law applies only to a taxpayer's principal residence and thus does not help an investor or vacation home owner who loses her property.
One important point to keep in mind is that even without the new law there were two important exceptions to the debt forgiveness provisions even before the president signed the new law. The taxpayer will not have debt forgiveness income, if he went bankrupt, or if the forgiveness of the debt left him insolvent. When bankruptcy occurs most taxpayers know they have filed bankruptcy. Insolvency occurs when a person's debt exceeds their property. Many people who lose their homes in foreclosures in fact qualify for the insolvency exception, but unfortunately insolvency is harder to define than bankruptcy, and many individuals overlook the potential benefit, because in their distressed financial condition they do not feel they can afford to hire a CPA or a tax attorney with a sophisticated knowledge of the tax law.
Article Source: http://EzineArticles.com/?expert=Patrick_Hart
The general rule of law is that a forgiveness of debt results in taxable income to the person owing the debt. The example that everyone has recently become familiar with is the homeowner who cannot afford to keep up his mortgage payments, but who cannot sell the house for enough to pay off the mortgage. Such individuals some times negotiate with their mortgage company what is called a "short sale. " In a short sale a mortgage company agrees to accept what the homeowner can get for selling the house in full satisfaction of the mortgage. For example if a mortgage balance is $200,000.00, and the house will only sell for $180,000.00 the mortgage company may agree to accept $165,000.00 (this example assumes that the cost of selling the house such as realtor fees, transfer taxes and title insurance adds up to $15,000.00).
In this short sale example the mortgage company will lose $35,000.00 and will agree not to pursue the homeowner for the deficiency. The mortgage company accepts the deal, because they would have lost more money in a foreclosure proceeding. Although the homeowner walks away with nothing, he or she accepts the deal, because she can avoid owing the balance of the mortgage debt that the sale failed to pay off.
Unfortunately the seller of the property who has just lost his home will have $35,000.00 of taxable income. Furthermore, many people entering short sales are not aware of this law, and they only discover their liability, when they receive a letter from the IRS informing them that they failed to pay thousands of dollars of taxes, penalties and interest on their tax returns.
The Mortgage Forgiveness Debt Relief Act of 2007 does remove the tax liability for people going through home foreclosures and short sales, although the law fails to cover all situations. For one thing the act is a temporary law. It only covers the three year period of 2007 thru 2009. Furthermore, it only covers home acquisition financing, not home equity financing.
Example. Harry Hedger buys a house in 2004 for $250,000.00 with no money down. In 2006 he refinances the home for $300,000.00; so he may take advantage of a hot stock market tip. Unfortunately, the stock investment turns South, and in 2007 he sells his home in a short sale which nets $230,000.00 to the mortgage company. Harry's debt forgiveness is $70,000.00. $20,000.00 of this amount will be tax free, because it is home acquisition indebtedness, but he will still have $50,000.00 of taxable income.
Finally, the new law applies only to a taxpayer's principal residence and thus does not help an investor or vacation home owner who loses her property.
One important point to keep in mind is that even without the new law there were two important exceptions to the debt forgiveness provisions even before the president signed the new law. The taxpayer will not have debt forgiveness income, if he went bankrupt, or if the forgiveness of the debt left him insolvent. When bankruptcy occurs most taxpayers know they have filed bankruptcy. Insolvency occurs when a person's debt exceeds their property. Many people who lose their homes in foreclosures in fact qualify for the insolvency exception, but unfortunately insolvency is harder to define than bankruptcy, and many individuals overlook the potential benefit, because in their distressed financial condition they do not feel they can afford to hire a CPA or a tax attorney with a sophisticated knowledge of the tax law.
Article Source: http://EzineArticles.com/?expert=Patrick_Hart
3/06/2008
Important Tax Refund Decisions - RAL vs Direct Deposit
Each year, taxpayers from all walks of life find themselves wading through tons of information regarding filling returns, paying taxes, anticipating refunds and more. While filing your taxes is certainly not the hassle it once was, thanks to the opportunity to e-file online, it is still important to be aware of all of your options. This is especially true of the tax refund process; or more specifically, how you choose to receive your refund. Some consumers don't mind waiting six weeks or more for a paper check to arrive in the mail. However, others want access to their money immediately. This is where the decision between RAL, short for Refund Anticipation Loan, and direct deposit comes into the play.
An RAL is a common way in which many taxpayers choose to receive their refund. While this is a more immediate option, it is important to note that this is a high-interest rate loan made against an expected refund amount. Most people choose the RAL option when they need their refund money for immediate purposes. However, the tax preparation offices that often help to originate these loans charge a fee in addition to the interest and/or finance charges accrued by the banks that actually make the loan to the customer. Critics of this process not only point to exuberant APRs (annual percentage rate) on these types of loans (in fact, the APR on credit card advances is lower than it is on most RALs), but also to the fact that they target low-income taxpayers, who often utilize their refunds for a pressing financial need.
Additionally, RALs are not only controversial because of the fees paid by the taxpayers, but also because of the risk taken by the bank. Tax returns can take up to 60 days to be fully processed through the Internal Revenue Service. Oftentimes, the amount of the return is calculated utilizing the information provided by the taxpayer and in some instances, this information can be false. Therefore, by giving the taxpayer access to this money before the return is processed means that banks can sometimes take a gamble on an RAL --- and lose.
However, with the advent of an easier-to-use e-filing process, direct deposit has become much more feasible option among consumers. Direct deposit allows taxpayers to have their refunds deposited directly in their bank account, usually within 14 days of filing. Since this is not a loan or advance of any sort, there are no fees or extra charges associated with this option (other than those that may be charged by your bank for ACH deposits). This is not only a fast method of receiving your refund, but also a safer way to get what is often a large lump-sum of money.
It is important when filling your return that you double check your account information before submitting it for a direct deposit. Your routing and account numbers should be accurate to ensure that there are no delays in receiving your money.
Mark Forbes is an analyst at efile.com, an innovative and easy to use website for Online Tax Preparation. Efile.com has up to date tax news, articles & more. Click to find out more information about Tax Refund Anticipation Loan and the benefits of using IRS Direct Deposit.
Article Source: http://EzineArticles.com/?expert=Mark_Forbes
An RAL is a common way in which many taxpayers choose to receive their refund. While this is a more immediate option, it is important to note that this is a high-interest rate loan made against an expected refund amount. Most people choose the RAL option when they need their refund money for immediate purposes. However, the tax preparation offices that often help to originate these loans charge a fee in addition to the interest and/or finance charges accrued by the banks that actually make the loan to the customer. Critics of this process not only point to exuberant APRs (annual percentage rate) on these types of loans (in fact, the APR on credit card advances is lower than it is on most RALs), but also to the fact that they target low-income taxpayers, who often utilize their refunds for a pressing financial need.
Additionally, RALs are not only controversial because of the fees paid by the taxpayers, but also because of the risk taken by the bank. Tax returns can take up to 60 days to be fully processed through the Internal Revenue Service. Oftentimes, the amount of the return is calculated utilizing the information provided by the taxpayer and in some instances, this information can be false. Therefore, by giving the taxpayer access to this money before the return is processed means that banks can sometimes take a gamble on an RAL --- and lose.
However, with the advent of an easier-to-use e-filing process, direct deposit has become much more feasible option among consumers. Direct deposit allows taxpayers to have their refunds deposited directly in their bank account, usually within 14 days of filing. Since this is not a loan or advance of any sort, there are no fees or extra charges associated with this option (other than those that may be charged by your bank for ACH deposits). This is not only a fast method of receiving your refund, but also a safer way to get what is often a large lump-sum of money.
It is important when filling your return that you double check your account information before submitting it for a direct deposit. Your routing and account numbers should be accurate to ensure that there are no delays in receiving your money.
Mark Forbes is an analyst at efile.com, an innovative and easy to use website for Online Tax Preparation. Efile.com has up to date tax news, articles & more. Click to find out more information about Tax Refund Anticipation Loan and the benefits of using IRS Direct Deposit.
Article Source: http://EzineArticles.com/?expert=Mark_Forbes
3/05/2008
List Of Tax Deductions
If you itemize your deductions when you file your tax return, you might have wondered where can you can find a list of tax deductions. You can go through the IRS website or sit for an hour long consultation with a Tax pro. Most people do not take advantage of all the Tax Deductions that they are eligible for - this can make a huge difference in how much of your money you keep for yourself versus paying Uncle Sam in taxes.
Here is a list of deductions for reference - use it as a starting point for further investigation. Only your tax preparer or tax professional can tell you for sure if any of these deductions apply to you. You can use this list of deductions to see if you might have missed out on some valuable tax deductions.
This is by no means a complete list of deductions- its only the most common deductions, and, that could apply to a wide range of individuals.
List of Deductions:
Auto registration fees
- Tip: If you don't remember how much you paid, see your auto registration card.
Real estate expenses
- Mortgage interest
- Mortgage prepayment penalties
- Early withdrawal Penalties
- Points paid for mortgage on primary residence
- Real estate taxes
Charitable contributions
- Cash contributions to US charities
- Non- cash contributions made to U.S. charities (eg. Red cross, Salvation Army)
Investment expenses
- Tax Preparation fees charged by accountant.
- Online tax Preparation fees (cost of tax preparation software or online tax fees)
- Brokerage fees
- Margin interest paid in investment accounts.
- Investment fees
- Legal fees
- Safe deposit box rental
Taxes
- State & Local Income tax
- Property taxes for Condo or Coops
- Disability insurance tax (certain states)
- Occupational taxes
- Personal property tax
- Real property tax
- State transfer tax
- Withholding taxes
Casualty and Theft Losses
- Losses to your home or property due to Theft or acts of nature
Books and Publications
- Books, trade journals, newspapers and publications you paid for that is used in your profession.
Dues and Fees
- Dues to a professional organization for people in your profession
- Union dues, initiation fees, and assessments for benefit payments to unemployed union members.
- Regulatory fees for your profession
- Dues to chambers of commerce and similar organizations
- Licenses paid to state or local governments
Education and Research
- Educational expenses only if its related to your present work that maintains or improves your skills.
- Research expenses
- Equipment and Supplies
Business use of Home computer & Internet
- Must be for the convenience of your employer and required as a condition of your employment.
- Supplies and tools you use in your work
- Internet connection must be for the convenience of your employer and required as a condition of your employment.
Job search expenses
- To deduct job search expenses, you must be looking for a job in your present line of work (not for a new job)
- Resume preparation (drafting, typing, printing, mailing, faxing)
- Employment agency fees
- Recruiters' fees
- Career counseling to assist you in improving your position
- Legal and accounting fees you pay in connection with employment contract negotiations and preparation
- Advertising for job search
- Transportation costs to job interviews
- Long distance calls to prospective employers
- Newspapers you purchase for searching classifed sections
- 50% of your meals you pay for that are directly related to your job search
- Travel expenses if you traveled while looking for a job lodging, meals (50% of the cost), etc. are deductible only if the primary purpose of your trip is to look for a job
- Keep a log for your travel expenses incurred on your job search
Standard disclaimer: This list of deductions is not to be construed as tax advice. Tax laws change every year, always consult the IRS and a qualified tax pro for up to date changes in tax laws and tax advice.
An increasing number of people are preparing their taxes using tax preparation software or using online tax preparation services, either of these methods will walk you through most of these deductions and pick only the valid deductions for your tax situation.
About:
Ron Robson is a freelance writer. Visit his site for Tax Filing Resources This article may be freely re-published or distributed as long as the links contained in this article is intact.
Article Source: http://EzineArticles.com/?expert=Ronald_Robson
Here is a list of deductions for reference - use it as a starting point for further investigation. Only your tax preparer or tax professional can tell you for sure if any of these deductions apply to you. You can use this list of deductions to see if you might have missed out on some valuable tax deductions.
This is by no means a complete list of deductions- its only the most common deductions, and, that could apply to a wide range of individuals.
List of Deductions:
Auto registration fees
- Tip: If you don't remember how much you paid, see your auto registration card.
Real estate expenses
- Mortgage interest
- Mortgage prepayment penalties
- Early withdrawal Penalties
- Points paid for mortgage on primary residence
- Real estate taxes
Charitable contributions
- Cash contributions to US charities
- Non- cash contributions made to U.S. charities (eg. Red cross, Salvation Army)
Investment expenses
- Tax Preparation fees charged by accountant.
- Online tax Preparation fees (cost of tax preparation software or online tax fees)
- Brokerage fees
- Margin interest paid in investment accounts.
- Investment fees
- Legal fees
- Safe deposit box rental
Taxes
- State & Local Income tax
- Property taxes for Condo or Coops
- Disability insurance tax (certain states)
- Occupational taxes
- Personal property tax
- Real property tax
- State transfer tax
- Withholding taxes
Casualty and Theft Losses
- Losses to your home or property due to Theft or acts of nature
Books and Publications
- Books, trade journals, newspapers and publications you paid for that is used in your profession.
Dues and Fees
- Dues to a professional organization for people in your profession
- Union dues, initiation fees, and assessments for benefit payments to unemployed union members.
- Regulatory fees for your profession
- Dues to chambers of commerce and similar organizations
- Licenses paid to state or local governments
Education and Research
- Educational expenses only if its related to your present work that maintains or improves your skills.
- Research expenses
- Equipment and Supplies
Business use of Home computer & Internet
- Must be for the convenience of your employer and required as a condition of your employment.
- Supplies and tools you use in your work
- Internet connection must be for the convenience of your employer and required as a condition of your employment.
Job search expenses
- To deduct job search expenses, you must be looking for a job in your present line of work (not for a new job)
- Resume preparation (drafting, typing, printing, mailing, faxing)
- Employment agency fees
- Recruiters' fees
- Career counseling to assist you in improving your position
- Legal and accounting fees you pay in connection with employment contract negotiations and preparation
- Advertising for job search
- Transportation costs to job interviews
- Long distance calls to prospective employers
- Newspapers you purchase for searching classifed sections
- 50% of your meals you pay for that are directly related to your job search
- Travel expenses if you traveled while looking for a job lodging, meals (50% of the cost), etc. are deductible only if the primary purpose of your trip is to look for a job
- Keep a log for your travel expenses incurred on your job search
Standard disclaimer: This list of deductions is not to be construed as tax advice. Tax laws change every year, always consult the IRS and a qualified tax pro for up to date changes in tax laws and tax advice.
An increasing number of people are preparing their taxes using tax preparation software or using online tax preparation services, either of these methods will walk you through most of these deductions and pick only the valid deductions for your tax situation.
About:
Ron Robson is a freelance writer. Visit his site for Tax Filing Resources This article may be freely re-published or distributed as long as the links contained in this article is intact.
Article Source: http://EzineArticles.com/?expert=Ronald_Robson
3/04/2008
How To Estimate Your Irs Tax Refund In Advance, For Free
Wouldn't it be nice to know how much your income tax refund check will be. It's like having money in the bank. Yes, there is a simple way to estimate your tax refund in advance and it won't cost you a dime.
I'm about to show you how you can estimate your Federal IRS income tax refund or return in advance, for free!
How to estimate your income tax refund
Forget about using pen, paper and a calculator, we're going to estimate your taxes with the help of the Internet. Using an online tax refund estimator, we can get this done in about 10-15 minutes. The tax refund estimator will need to gather information about you, to make an estimate. All you have to do is make simple entries.
Here is how and what you'll be asked:
Screen 1. Your filing status, age, your children and other dependents.
Screen 2. Earnings, gross wages and self employment income.
Screen 3. Any investment income such as interest, dividends and capital gains.
Screen 4. Any other income such as rental, royalty , partnerships, trusts, tax refunds, alimony, unemployment, social security and any other income.
Screen 5. Ira and education expenses such as Ira contributions, student loan interest, college tuition and expenses.
Screen 6. Expenses, business and work related, self employed health insurance, moving, Keogh and other.
Screen 7. Deductions and personal expenses such as medical, real estate, mortgage interest, home equity loan, charitable contributions, alimony you paid, child care, gambling losses, theft and other.
Screen 8. Miscellaneous tax items. These tax items apply to relatively few people. AMT and other misc.
Screen 9. Withholding, Federal income tax withheld, State income tax withheld and future withholding if before end of tax year.
Screen 10. Tax payments you have made or will make for this year.
And now what you've been waiting for.
The Results! That's it, you'll know how much your tax refund will be, so you can make important financial decisions.
You can go to Turbo Tax Online right now, and estimate your tax refund just like I showed you. Try the Turbotax Online Tax Refund Estimator today and see how large your tax refund will be. When you prepare and file taxes online, you get all the tools you need for a fast, easy and bigger than ever tax refund.
Article Source: http://EzineArticles.com/?expert=FrankW_Ellis
I'm about to show you how you can estimate your Federal IRS income tax refund or return in advance, for free!
How to estimate your income tax refund
Forget about using pen, paper and a calculator, we're going to estimate your taxes with the help of the Internet. Using an online tax refund estimator, we can get this done in about 10-15 minutes. The tax refund estimator will need to gather information about you, to make an estimate. All you have to do is make simple entries.
Here is how and what you'll be asked:
Screen 1. Your filing status, age, your children and other dependents.
Screen 2. Earnings, gross wages and self employment income.
Screen 3. Any investment income such as interest, dividends and capital gains.
Screen 4. Any other income such as rental, royalty , partnerships, trusts, tax refunds, alimony, unemployment, social security and any other income.
Screen 5. Ira and education expenses such as Ira contributions, student loan interest, college tuition and expenses.
Screen 6. Expenses, business and work related, self employed health insurance, moving, Keogh and other.
Screen 7. Deductions and personal expenses such as medical, real estate, mortgage interest, home equity loan, charitable contributions, alimony you paid, child care, gambling losses, theft and other.
Screen 8. Miscellaneous tax items. These tax items apply to relatively few people. AMT and other misc.
Screen 9. Withholding, Federal income tax withheld, State income tax withheld and future withholding if before end of tax year.
Screen 10. Tax payments you have made or will make for this year.
And now what you've been waiting for.
The Results! That's it, you'll know how much your tax refund will be, so you can make important financial decisions.
You can go to Turbo Tax Online right now, and estimate your tax refund just like I showed you. Try the Turbotax Online Tax Refund Estimator today and see how large your tax refund will be. When you prepare and file taxes online, you get all the tools you need for a fast, easy and bigger than ever tax refund.
Article Source: http://EzineArticles.com/?expert=FrankW_Ellis
3/03/2008
Investment Property - How to Define It?
With the increase of buy to let properties and the hype in the property investing market, often an investment property is confused with a simple property trade deal or speculation.
Often any property purchased is viewed as an asset and therefore called an investment property. That is true in the wide sense of a discussion. However, a property for investment is not any property purchased just because it is viewed as an asset.
Purchasing a property that is not a primary dwelling or holiday home, can be generalized in 3 main categories:
1. Resale - For the purpose of selling for profit (often called a "flip")
2. Fix / Renovate - For the purpose of renovating and reselling for profit (often called a property trade).
3. Letting - For the purpose of letting to a tenant and generating income for the long term (often called buy to let property).
Those are the major categories. However, not all of them are investment properties.
In the first case, when one buys a property to resell, it would be considered a speculation or a trade. In terms of income, on a short term deal of reselling a property, even the tax man will ask for income tax instead of capital gains tax (CGT). Therefore, it is not an investment property, it is simply a trade and the property is "stock" just like apples and pears that are sold at the market.
In the second case, when one finds a property that needs renovations, fixes the property and then resells the property, it is also a trade. The holding period is short term and the tax man again will ask for income tax not CGT. Therefore, this category is also not an investment property but rather a trade. The renovations Option varies significantly in strategy from the speculation, as in this case the "stock" which is the property was bought at low value, increased in value by the renovations and sold for its new value. In a speculation the speculator only waits for a period of time for the market to move up in price, and resells without doing anything to the property to increase the value.
In the third case, when one buys a property to let the property to tenants for the long term and earns income from it - it is an investment property.
This is where the confusion occurs.
The speculator often does rent out the property to tenants, to reduce the Mortgage Bond payments, (often called shortfalls). The letting out of a property for the short term to resell later for profit confuses the term investment property with speculating and trading.
Just because the property is let to a tenant for a period of time, this does not make the property an investment property. The long term holding of the property will determine if the property was bought for investment or only for speculating and stock trading.
The last resource of clarification is SARS. Every sale of property has to attract some tax, either CGT or income tax. SARS guidelines make this issue very clear.
Article Source: http://EzineArticles.com/?expert=Karen_Wheller
Karen Wheller - EzineArticles Expert Author
Often any property purchased is viewed as an asset and therefore called an investment property. That is true in the wide sense of a discussion. However, a property for investment is not any property purchased just because it is viewed as an asset.
Purchasing a property that is not a primary dwelling or holiday home, can be generalized in 3 main categories:
1. Resale - For the purpose of selling for profit (often called a "flip")
2. Fix / Renovate - For the purpose of renovating and reselling for profit (often called a property trade).
3. Letting - For the purpose of letting to a tenant and generating income for the long term (often called buy to let property).
Those are the major categories. However, not all of them are investment properties.
In the first case, when one buys a property to resell, it would be considered a speculation or a trade. In terms of income, on a short term deal of reselling a property, even the tax man will ask for income tax instead of capital gains tax (CGT). Therefore, it is not an investment property, it is simply a trade and the property is "stock" just like apples and pears that are sold at the market.
In the second case, when one finds a property that needs renovations, fixes the property and then resells the property, it is also a trade. The holding period is short term and the tax man again will ask for income tax not CGT. Therefore, this category is also not an investment property but rather a trade. The renovations Option varies significantly in strategy from the speculation, as in this case the "stock" which is the property was bought at low value, increased in value by the renovations and sold for its new value. In a speculation the speculator only waits for a period of time for the market to move up in price, and resells without doing anything to the property to increase the value.
In the third case, when one buys a property to let the property to tenants for the long term and earns income from it - it is an investment property.
This is where the confusion occurs.
The speculator often does rent out the property to tenants, to reduce the Mortgage Bond payments, (often called shortfalls). The letting out of a property for the short term to resell later for profit confuses the term investment property with speculating and trading.
Just because the property is let to a tenant for a period of time, this does not make the property an investment property. The long term holding of the property will determine if the property was bought for investment or only for speculating and stock trading.
The last resource of clarification is SARS. Every sale of property has to attract some tax, either CGT or income tax. SARS guidelines make this issue very clear.
Article Source: http://EzineArticles.com/?expert=Karen_Wheller
Karen Wheller - EzineArticles Expert Author
3/02/2008
2007, 2008 Income Tax Estimator, Calculator Online
Are you wondering how much money you'll get back on income tax this year? Are bills piling up, or are you thinking about a spring vacation to a warm beach?
Whether you use income tax refund money to pay bills or go on a vacation, you have the opportunity to know how much money that will be today. By estimating your taxes, you can project the amount you will receive at tax time.
By tax estimating you can assess your income up to today, project the amount you expect to make prior to tax time, and give you a reasonable estimate of what your tax debt and possible refund will be.
Are you worried that you are lending the government money that you could be collecting interest on? If you are getting a large refund each year, you are essentially extending the government a no interest loan. They are using your money for much of the year and then repaying you with no interest!
If you owe the government money at tax time they will charge you interest if you can't pay it all at once. This hardly seems fair! Stay ahead of the game by putting your weekly tax contribution into a guaranteed savings plan until tax time, this way you collect the interest, not the government.
A tax estimator, calculator program can help you decide how much you can put into interest earning savings each week and still meet you tax obligation at tax time.
Are you having trouble paying your household bills and getting a big refund at the end of the year? Tax estimating can help you better predict how much you need to contribute to your tax obligation in each paycheck. Perhaps you are paying too much. Tax estimating can help you decide if you are contributing too little or too much. Wouldn't it be better to have that money when you need it, then to wait until tax time?
Tax estimation can be your right hand man, assisting you to make fiscally sound decisions about your money. You can make wise decisions about when and how Uncle Sam gets his money. You can be in the driver's seat!
You can use the Free Tax Estimator provided by Turbo Tax Online to figure out your income tax refund. Try the Free Tax Estimator and get all the tax deductions and credits you deserve.
Canadian Tax Calculator
Calculates Canadian GST, PST and HST for each province
Article Source: http://EzineArticles.com/?expert=FrankW_Ellis
Whether you use income tax refund money to pay bills or go on a vacation, you have the opportunity to know how much money that will be today. By estimating your taxes, you can project the amount you will receive at tax time.
By tax estimating you can assess your income up to today, project the amount you expect to make prior to tax time, and give you a reasonable estimate of what your tax debt and possible refund will be.
Are you worried that you are lending the government money that you could be collecting interest on? If you are getting a large refund each year, you are essentially extending the government a no interest loan. They are using your money for much of the year and then repaying you with no interest!
If you owe the government money at tax time they will charge you interest if you can't pay it all at once. This hardly seems fair! Stay ahead of the game by putting your weekly tax contribution into a guaranteed savings plan until tax time, this way you collect the interest, not the government.
A tax estimator, calculator program can help you decide how much you can put into interest earning savings each week and still meet you tax obligation at tax time.
Are you having trouble paying your household bills and getting a big refund at the end of the year? Tax estimating can help you better predict how much you need to contribute to your tax obligation in each paycheck. Perhaps you are paying too much. Tax estimating can help you decide if you are contributing too little or too much. Wouldn't it be better to have that money when you need it, then to wait until tax time?
Tax estimation can be your right hand man, assisting you to make fiscally sound decisions about your money. You can make wise decisions about when and how Uncle Sam gets his money. You can be in the driver's seat!
You can use the Free Tax Estimator provided by Turbo Tax Online to figure out your income tax refund. Try the Free Tax Estimator and get all the tax deductions and credits you deserve.
Canadian Tax Calculator
Calculates Canadian GST, PST and HST for each province
Article Source: http://EzineArticles.com/?expert=FrankW_Ellis
3/01/2008
Can The Bush Tax Cut Work?
After weeks of increasingly dismal reports from the financial sector, many regular Americans are beginning to worry that the US may be close to or already in recession. While government intervention in the economy is relatively uncommon in US history, since its establishment in the 1930's, the Federal Reserve has been able to manipulate interest rates, giving them the power to make all real estate loans more or less expensive by some degree, which comes with a hefty responsibility: controlling inflation. While the Fed has cut their rate three times in as many months last quarter, the economy also began to tailspin simultaneously. This puts them up between a rock and a hard place, because if interest rates are too low, inflation can begin to threaten, especially as the dollar continues to depress against other currencies. Fortunately, there is one part of the economy that the government is able to adjust in order to make ordinary American's pockets a bit less bare: taxes.
President Bush has recently begun talks concerning some kind of economic stimulus package, which can be understood to mean some kind of tax break. But with over two million foreclosures predicted to happen over 2008, it seems unlikely that any single factor can stem the tide of sub-prime woe besides some kind of magic undo button or two million real estate mortgage refinances. This is because most of the economic slowdown is related to the riskiness of these mortgages that were issued in the first place. By virtue of a collective attempt at clever financial trickery, most of the major banks are now forced to write off their sub-prime mortgage debt as bad before it even becomes worthless.
A tax break would have to be nearly immediate in terms of how quickly it is implemented, and have to cover an exceptional cross-section of poorer Americans, in order to have much of an effect. This is because, according to recent surveys, that demographic is most likely to fall into financial trouble over the coming months. As simultaneous pressure on both lower-income Americans and the well-to-do financial sector increases, the middle class will be stuck like a trapped child in the middle seat on a long car trip. Everyone will be getting a bit uncomfortable unless some action is taken.
The only difference between America and the car trip is that no one will have to ask if we're there yet, because whichever course the economy takes, it will take it quickly. Another possibility is that, even if a tax cut is unable to completely shore up faltering consumer confidence on its own, a concerted strategy of extreme interest rate cuts combined with tax relief and a massive short-term freeze on prime and sub-prime mortgages could have the kind of effects necessary for the American powerhouse to avoid grinding to a halt. Either way, if the spring quarter sees losses on the scale of late 2007, we will be in a classical recession with fewer options than we have right now. The End.
Escapeso is as a real estate company focused on helping buyers interested in Austin real estate. You can research the market on their Austin real estate blog or start your Austin home search online using the Austin MLS.
Article Source: http://EzineArticles.com/?expert=Ki_Gray
President Bush has recently begun talks concerning some kind of economic stimulus package, which can be understood to mean some kind of tax break. But with over two million foreclosures predicted to happen over 2008, it seems unlikely that any single factor can stem the tide of sub-prime woe besides some kind of magic undo button or two million real estate mortgage refinances. This is because most of the economic slowdown is related to the riskiness of these mortgages that were issued in the first place. By virtue of a collective attempt at clever financial trickery, most of the major banks are now forced to write off their sub-prime mortgage debt as bad before it even becomes worthless.
A tax break would have to be nearly immediate in terms of how quickly it is implemented, and have to cover an exceptional cross-section of poorer Americans, in order to have much of an effect. This is because, according to recent surveys, that demographic is most likely to fall into financial trouble over the coming months. As simultaneous pressure on both lower-income Americans and the well-to-do financial sector increases, the middle class will be stuck like a trapped child in the middle seat on a long car trip. Everyone will be getting a bit uncomfortable unless some action is taken.
The only difference between America and the car trip is that no one will have to ask if we're there yet, because whichever course the economy takes, it will take it quickly. Another possibility is that, even if a tax cut is unable to completely shore up faltering consumer confidence on its own, a concerted strategy of extreme interest rate cuts combined with tax relief and a massive short-term freeze on prime and sub-prime mortgages could have the kind of effects necessary for the American powerhouse to avoid grinding to a halt. Either way, if the spring quarter sees losses on the scale of late 2007, we will be in a classical recession with fewer options than we have right now. The End.
Escapeso is as a real estate company focused on helping buyers interested in Austin real estate. You can research the market on their Austin real estate blog or start your Austin home search online using the Austin MLS.
Article Source: http://EzineArticles.com/?expert=Ki_Gray
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