Tag: tax deduction

Getting A Mortgage Tax Deduction

You may assume that filing taxes has to be confusing, but that isn’t the case. With the use of Turbo Tax 2014, you can make the filing process less stressful.

If you have a mortgage, you may be considering utilizing the mortgage tax deduction when handling your taxes.

My Mortgage Docs to be Reviewed by an Expert
My Mortgage Docs to be Reviewed by an Expert (Photo credit: i am real estate photographer)

Many people attempt to lower their taxable income with the use of deductions and credits. In order to do this, you may want to claim your mortgage interest. Some homeowners plan to use the deduction and hope to benefit from it, so they choose not to pay off their mortgage. You’re likely wondering if it makes more sense to benefit from the savings or get rid of your debt altogether.

Many individuals find that they have enough money to pay off their debts and still have some savings for emergencies, but they’re not sure if they should make this move.

If you choose to pay off your mortgage so that you can be debt free, remember that tax credits are different than deductions. A credit will lower your taxable income and a deduction will lower the percentage of tax that you owe. If you don’t have a mortgage, you may pay more in taxes, but it may still be less than what you’d pay in interest if you had a loan. In this case, it doesn’t make sense to keep a mortgage in order to get the tax breaks.

The TurboTax ItsDeductible App

The TurboTax ItsDeductible App

Intuit Inc. announced on December 3, 2013 its new TurboTax ItsDeductible app, had become available for use on the iPhone. The app is geared towards assisting the estimated seventy-five percent of US citizens, who make donations to charity, to be able to convert their goodwill into considerable tax deductions. Free of charge, the app is offered on the iPhone with iOS7 app store.

The Turbo Tax Online program is very popular. Persons are able to monitor their charitable donations easily with TurboTax ItsDeductible, through the combination of the convenience and portability of a mobile device. Valuations for over ten thousand items commonly donated, such as toys, sporting goods, clothing, appliances, games, household products among others, are featured on this app.

Most taxpayers are aware that non cash donations can be tax deductible, however they do not always accurately value the goods that they donate. This is usually because they randomly guess the value. An example of this is when bags of clothing are donated, and perhaps valued at $50.00, when in fact the actual value is over $300.00.

Before leaving a donation facility, persons can quickly and easily enter their donated items into TurboTax ItsDeductible. The app will then automatically use the guidelines established by the Internal Revenue Service, to make a fair market valuation. This will ensure that users receive the total deductions that they are entitled to, on their tax returns. Location sensitive technology is used by the app to capture the address of the charity quickly, for the purpose of tax record keeping. So that philanthropists can be rewarded properly for their generosity, they should use this app to monitor their donations.

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Free SCORE Tax Tips

Free SCORE Tax Tips

Having your own small business can be a rewarding experience. There are many aspects that can be difficult to accomplish on your own though. The most important issue that needs to be watched and completed correctly is taxes. Ten free tax tips offered by the Score business website can be helpful to any business owner.

Deductions are the most important thing to remember with your own business. Do not overlook those deductions that may not be the most obvious. Even trips that combine business and pleasure can be used as a write off, just make sure more than half is business related. If your business has employees, you need to worry about getting the correct taxes out of paychecks. Social security, medicare, state and federal taxes all must be withheld. Also unemployment taxes and employer matching are also important.

Keep all of the tax documents for at least seven years. Good record keeping could save money in the end. Business tax returns and licenses should be kept indefinitely though.

Make sure that all of the business tax deadlines are met. April 15 may be the personal deadline but it is not the same for business. All business owners know that estimated taxes are due four times a year. And they remember that sales taxes are due either monthly or quarterly or their bookkeeper keeps track of the dates for them. Employee taxes are even more difficult, they are due either weekly, monthly, or quarterly. This will decide manly on the size of the business. All of these different rules can affect the business greatly. Keep on top of your taxes to avoid tax penalties and interest charges from the IRS.

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Many Families And Indivduals Are Eligible For Tax Credits

WASHINGTON – OCTOBER 13: U.S. President Barack Obama speaks during a Rose Garden event about the American Opportunity Tax Credit (AOTC) October 13, 2010 at the White House in Washington, DC. Obama had a meeting with college students and their families on American Opportunity Tax Credit (AOTC) and he urged the Congress to extend college tax credits. (Image credit: Getty Images via @daylife)

The 2010 tax year offered many deductions and credits for those who chose to itemize their deductions. That is good news for many taxpayer’s but the better news is that there are some new 2011 tax credits that many people may not be aware of, and better still some of these credits can be used even if you do not itemize on your tax return. One credit that some of us might overlook is an energy tax deduction.

The energy credit can be taken up ten percent on a project with a five-hundred dollar cap. It can be used on anything from gas, electric or oil water heaters to energy star windows. check with your tax professional or the IRS for information on energy related deductions and credits.

Other credit that might be overlooked are Education Incentives. One such deduction under this heading would be the American Opportunity Tax Credit. This is a credit of up to $2500.00 of the cost of tuition and related expenses. This also includes the cost of materials. There is also a deduction or credit for the interest paid on a student loan.

There are many credits for families that are worth looking into. Child tax credit as well as Dependant Care Tax credit. Dependant Care Credit allows a taxpayer credit for a percentage of childcare expenses for children under the age of 13 or disabled dependants.

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5 Tax Tips for Self-Employed Individuals in Any Field

Self-employment is like ice cream; it comes in a large variety of flavors. You can be a freelance writer, a graphic designer, a landscaper or a dog walker. Some people are self-employed full time, while others work part-time around their “day job”. Whatever your flavor of self-employment is, there are some definite tax tips you need to know.

If You Earn It, You Have to Declare It

If you do work for businesses, they will generally send you a 1099 form that you have to file at the end of the year. However, even if you work for individuals, or a business that does not send you a 1099 form, you still have to declare that income. Do not be fooled by thinking, “If I make less than $600 from one person (or business) during the year then I don’t have to declare it.” That is an often-misunderstood concept. The IRS expects you to declare every penny you earn.

Track Your Income and Expenses

You do not want to hand your accountant envelopes full of unsorted receipts and cashed checks come tax season. The accountant may miss some deductions because he or she could not find the right slip of paper. Even relatively inexpensive programs like Quicken work great. Keep track of all your hard copy paperwork and keep it organized as well. The IRS has very specific rules about business tax deductions and whoever does your tax return will need as clear a picture as possible to maximize your deductions.

Estimate Your Taxes

There are two ways to avoid being hit with a whopping tax debt at the end of the year. Either you have to be frugal enough to put away a certain percentage of every payment you receive, or you have to arrange with the IRS to pay quarterly estimated tax throughout the year. Most people choose the latter in order to avoid yearly penalties for underpayment. It may be tempting to spend all your money as quick as you earn it, but remember that just because no one took taxes out when you earned it, that does not mean you will not have to pay later. Estimating and paying your taxes is one way of avoiding having to file a tax extension form in the future.

Pick Your Name

If you are doing business under your own name, that is great. You just file a Schedule C form with the IRS and life is simple. However, if you are doing business under a company name, then you should have some sort of business license in order to avoid problems with the IRS. It can be a simple DBA (doing business as) license, but you want to make sure that you have all your legal paperwork in order before filing your taxes.

Self-Employment Tax

The IRS does charge a special tax rate for people who are self-employed. You will have to pay the self-employment tax, but you can deduct half of when figuring out your adjusted gross income. Form 1040 Schedule SE, available on the IRS website, will help you figure out exactly how much your self-employment tax will be.

Filing a tax return when you are self-employed is trickier than filing a regular tax return. Many people find that going to a professional tax accountant is well worth the initial fees in order to get the highest possible return they can. Unless you are very knowledgeable about business tax laws, you should keep yourself as organized as possible and seek the help of a reputable professional when it comes time to file your taxes.

About the Author: Annita Grosh is an accountant who specializes in working with self-employed invididuals. She loves watching as an idea becomes a workable and profitable business.

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Five Money Saving Methods of Working From Home

Finding new ways to save money is never easy, but working from home can make it easier to build up that savings account. It is necessary to spend money to have even a slight chance of making money and this is even true when it comes to getting a regular job. A regular job will cost much more than working from home through a few basic measures.

Reduced Transportation Cost:

Going to a regular job requires driving, taking a bus, riding a train or taking a subway. Regardless of the mode of transportation, most jobs away from home will require spending some money to reach the office space.

Working from home has a key benefit in saving cash via transportation. It is not necessary to spend a single penny getting from one room to the other. That benefit of reduced transportation can add up quickly by the end of the year.

Depending on the distance to the office and the mode of transportation, it can save as much as $100 or more per month in transportation costs. Even jobs close by that take 5 minutes to drive to, will cost you roughly $30 or more per month.

Lower Food Costs:

Going to a regular job opens a number of doors to the temptation to spend. While it is possible to pack a lunch and avoid coffee, it is always tempting to buy lunch at least once or twice a week. In some cases, running out the door might require buying lunch rather than packing lunch.

Staying at home has the benefit of saving on the cost of buying food outside. Not only it is less costly to make a meal and a pot of coffee at home, it is also much healthier than most restaurants and cafeterias available around a regular job.

Lower Clothing Costs:

Working at home offers the benefit of wearing comfortable clothes and avoiding expensive suits or work attire. Since the job will not entail face to face conversations with clients, going out to an office or making an impression with the outfit, the expense of clothing becomes much less.

The uniform of choice for working in the home is anything that feels comfortable and does not reduce motivation. That can range from casual outfits to semi-nice clothes, based on personal preferences.

It is not necessary to hide away from the world, but the freedom of wardrobe choice while working at home is a key reduction in necessary expenditures.

Tax Deductions:

As an individual who works from home, tax benefits are available. Self-employed individuals can cut taxes by making use of deductions. The home office space, gas used while working, any equipment necessary to perform job tasks, office supplies and even utilities will all provide a discount.

It is not possible to claim tax deductions on your return when working at a regular w2 job that relate to home expenses such as mortgage interest. Only those who work at home can add the expense of personal computers and a percentage of utilities to the tax deductions.

Making More Money:

Working from home wastes much less time. Even a half hour commute to work will result in five hours or more per week in just transportation. Working from home clears up those five hours so that more time is spent making money.

Working from home has clear benefits when it comes to saving more cash. Instead of wasting a few hundred dollars in transportation, clothing and other expenses necessary to work in a regular job, it is possible to save that cash by working at home. Saving money at home starts with determining the cost of going to a regular job.

Jeff is an Internet marketing consultant and content distributor for NY divorce lawyers, and He is also a passionate blogger who often writes about money saving, sharing his knowledge and experience in that field.

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