Pay Less Taxes Forever
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==== ==== Pay Zero Taxes Like The Wealthy Do http://tinyurl.com/beat-irs ==== ====
Deductible Taxes a. State, local and foreign income taxes; b. Real estate taxes; c. Personal property taxes; and d. State and local sales taxes. In this category you can find various governmental taxes imposed on your income, property, real estate, car and more. To claim this deduction simply look at your W2, and locate the box that indicates how much your employer withheld from your wages for state and local income tax. If you sent your state (or any other state) estimated tax payment, claim these payments too. In addition look at your 1098 form, that's your annual mortgage summery and see if there are property tax listed. If you pay your real estate tax independently, add up all the bills you have paid in 2009 for property tax. If you own a car and paid personal property tax on it, use that too as deductible taxes. Caution: IRS Topic 503 specifically disallows some tax payments;"Taxes and fees you cannot deduct on Schedule A include Federal income taxes, social security taxes, stamp taxes, or transfer taxes on the sale of property, homeowner's association fees, estate and inheritance taxes and service charges for water, sewer, or trash collection". Interest and Points a. Mortgage interest on principal resident; b. Points paid purchase of principal resident; c. Interest on home equity loan; and d. Student loan interest. Any homeowner that took a mortgage can claim the interest paid on that mortgage if some criteria are met. If your mortgage was taken from a U.S. bank or mortgage company, you will probably receive IRS form 1098, which reports the amount paid by you as interest in the tax year. Form 1098 also specifies any points paid and often real estate tax paid, if it was paid through an escrow account set up for you by the bank or mortgage company. The following situations qualify for mortgage interest deduction: 1. A mortgage you took out on or before October 13, 1987 (grandfathered debt) 2. A mortgage taken out after October 13, 1987, to buy, build, or improve your home, (called home
acquisition debt) but only if this debt plus any grandfathered debt totals $1 million or less throughout 2008. The limit is $500,000 if you are married filing separately. 3. A mortgage taken out after October 13, 1987, other than to buy, build, or improve your home (called home equity debt), but only if these mortgages total $100,000 or less throughout 2008, and all mortgages, including any grandfathered debt and home acquisition debt, on the home, total no more than your home's fair market value. The limit is $50,000 if you are married filing separately. Caution: IRS Topic 503 excludes some items form being claimed; "You cannot deduct personal interest. Personal interest includes interest paid on a loan to purchase a car for personal use. Personal interest also includes credit card and installment interest incurred for personal expenses. Items you cannot deduct as interest include points (if you are a seller), service charges, credit investigation fees, and interest relating to tax-exempt income, such as interest to purchase or carry tax-exempt securities." Charitable Contributions a. Cash contributions; and b. Non-Cash contributions. If you are a giver, this is your chance to benefit from your generosity. Contributions you have made to qualified organizations as defined in IRS Publication 526, Charitable Contributions may be deductible if they meet certain criteria. Non-Cash Contributions: In general, you can deduct the fair market value of any property you have donated. If you received any merchandise, goods, or services, including admission to a charity ball, banquet, theatrical performance, or sporting event in return to your contribution, you can only deduct the amount that exceeds the fair market value of that you have received. Cash Contributions: if your donation includes cash, check, or other monetary gift (regardless of amount), you can deduct that payment as qualified contributions if made to qualified organizations. Caution: IRS Topic 506 determines which documentation you need to keep to proof your donation; "For any contribution of $250 or more (including contributions of cash or property), you must obtain and keep in your records a contemporaneous written acknowledgment from the donee organization indicating the amount of the cash and a description of any property contributed, and whether the donee organization provided any goods or services in exchange for the gift. One document from the donee organization may satisfy both the written communication requirement for monetary gifts and the contemporaneous written acknowledgement requirement for all contributions of $250 or more." Business Use of Home Business Use of Home: This is a fun one. If you are "workaholic" and work anywhere anytime, including your home, you will be happy to know that the IRS understands you and really wants to help. Whether you are self-employed or are an employee, you may be able to deduct certain expenses for the part of your home you use for business despite the general denial of business expense deductions for the home. Not everything is deductible. The first criterion you must meet is that part of your home must be
used regularly and exclusively as one of the following: 1. The principal place of business for your trade or business; 2. The place where you meet and deal with your patients, clients, or customers in the normal course of your trade or business; or 3. In connection with your trade or business, if you use a separate structure that is not attached to your home. What can you deduct? In general most expenses paid to lease, maintain and repair the home are deductible including:
Business portion of real estate taxes; Deductible mortgage interest; Rent; Casualty losses; Utilities; Insurance; Depreciation; Maintenance and repairs.
Caution: IRS Topic 509 prohibits you from claiming certain expenses; "You may not deduct expenses for lawn care in general or for painting a room not used for business." How much can be claimed? Not 100% of the above expenses can be deductible mainly because only portion is used in the business and the rest is merely personal expense. To figure the deductible portion you should divide the number of square feet used for business by the total square feet in your home (if the rooms are approximately the same size, divide the number of rooms used for business by the total number of rooms in your home) and then multiple this % by the total amount of expenses listed above. Business Use of Care Have you ever been asked to use your car for your job? It's Payback time. Now you can save tax money by claiming business use of your car. How does it work? Simple. You can choose one of two methods: Standard mileage rate: the way this method works is that you multiple the actual business miles you have driven your car in the tax year by the standard miles allowance (for 2009 it's 55 cents per mile). Actual expense method. First, you divide the amount of business miles driven in the tax year by the total miles driven in the same period (you do that to determine the business portion of the car use). Then, you multiple that portion by the expenses actually paid to operate the car (include gas, oil, repairs, tires, insurance, registration fees, licenses, and depreciation (or lease payments). Caution: IRS Topic 510 restricts the use of the standard mileage method in some cases; "To use the standard mileage rate, you must own or lease the car; the car must not be used for hire, for example as a taxi; you must not operate five or more cars at the same time, as in a fleet operation; you must not have claimed a depreciation deduction using the Modified Accelerated Cost
Recovery System (MACRS) on the car in an earlier year or any method other than straight-line for its estimated useful life; you must not have claimed a Section 179 deduction or the special depreciation allowance on the car; and you must not have claimed actual expenses after 1997 for a car you leased. You cannot use the standard mileage rate if you are a rural mail carrier who received a "qualified reimbursement". Conclusion When you prepare your 2009 tax return, make sure you carefully read this article to determine which of the tax deductions mentioned in it could be applied to you. Using one or more of the deductions could lead to a much bigger refund not only this year but in many years to come.
http://TaxTreasure.com - As real people we understand that online taxes should be easy, simple, fast and maybe, maybe even fun (when, lets no go overboard). Because of that we at TaxTreasure.com developed a unique approach to online tax preparation which takes the hassle and tension off the table. We have designed a REAL-LIFE-EVENTS solution that does not bores you with endless questions and scary forms, but instead, ask you to simply tell us: "what happened to you this year"? All you have to do, is to tell us (or choose from our event list) what really happened to you, and we in return, provide you with valuable information that will help you to better understand what, where and when to report. We will also suggest how to save on taxes based on the events that you went through this year and advice you on how to maximize your refund in light of those events.
Article Source: http://EzineArticles.com/?expert=Tal_Rozen
==== ==== Pay Zero Taxes Like The Wealthy Do http://tinyurl.com/beat-irs ==== ====
Deductible Taxes a. State, local and foreign income taxes; b. Real estate taxes; c. Personal property taxes; and d. State and local sales taxes. In this category you can find various governmental taxes imposed on your income, property, real estate, car and more. To claim this deduction simply look at your W2, and locate the box that indicates how much your employer withheld from your wages for state and local income tax. If you sent your state (or any other state) estimated tax payment, claim these payments too. In addition look at your 1098 form, that's your annual mortgage summery and see if there are property tax listed. If you pay your real estate tax independently, add up all the bills you have paid in 2009 for property tax. If you own a car and paid personal property tax on it, use that too as deductible taxes. Caution: IRS Topic 503 specifically disallows some tax payments;"Taxes and fees you cannot deduct on Schedule A include Federal income taxes, social security taxes, stamp taxes, or transfer taxes on the sale of property, homeowner's association fees, estate and inheritance taxes and service charges for water, sewer, or trash collection". Interest and Points a. Mortgage interest on principal resident; b. Points paid purchase of principal resident; c. Interest on home equity loan; and d. Student loan interest. Any homeowner that took a mortgage can claim the interest paid on that mortgage if some criteria are met. If your mortgage was taken from a U.S. bank or mortgage company, you will probably receive IRS form 1098, which reports the amount paid by you as interest in the tax year. Form 1098 also specifies any points paid and often real estate tax paid, if it was paid through an escrow account set up for you by the bank or mortgage company. The following situations qualify for mortgage interest deduction: 1. A mortgage you took out on or before October 13, 1987 (grandfathered debt) 2. A mortgage taken out after October 13, 1987, to buy, build, or improve your home, (called home
acquisition debt) but only if this debt plus any grandfathered debt totals $1 million or less throughout 2008. The limit is $500,000 if you are married filing separately. 3. A mortgage taken out after October 13, 1987, other than to buy, build, or improve your home (called home equity debt), but only if these mortgages total $100,000 or less throughout 2008, and all mortgages, including any grandfathered debt and home acquisition debt, on the home, total no more than your home's fair market value. The limit is $50,000 if you are married filing separately. Caution: IRS Topic 503 excludes some items form being claimed; "You cannot deduct personal interest. Personal interest includes interest paid on a loan to purchase a car for personal use. Personal interest also includes credit card and installment interest incurred for personal expenses. Items you cannot deduct as interest include points (if you are a seller), service charges, credit investigation fees, and interest relating to tax-exempt income, such as interest to purchase or carry tax-exempt securities." Charitable Contributions a. Cash contributions; and b. Non-Cash contributions. If you are a giver, this is your chance to benefit from your generosity. Contributions you have made to qualified organizations as defined in IRS Publication 526, Charitable Contributions may be deductible if they meet certain criteria. Non-Cash Contributions: In general, you can deduct the fair market value of any property you have donated. If you received any merchandise, goods, or services, including admission to a charity ball, banquet, theatrical performance, or sporting event in return to your contribution, you can only deduct the amount that exceeds the fair market value of that you have received. Cash Contributions: if your donation includes cash, check, or other monetary gift (regardless of amount), you can deduct that payment as qualified contributions if made to qualified organizations. Caution: IRS Topic 506 determines which documentation you need to keep to proof your donation; "For any contribution of $250 or more (including contributions of cash or property), you must obtain and keep in your records a contemporaneous written acknowledgment from the donee organization indicating the amount of the cash and a description of any property contributed, and whether the donee organization provided any goods or services in exchange for the gift. One document from the donee organization may satisfy both the written communication requirement for monetary gifts and the contemporaneous written acknowledgement requirement for all contributions of $250 or more." Business Use of Home Business Use of Home: This is a fun one. If you are "workaholic" and work anywhere anytime, including your home, you will be happy to know that the IRS understands you and really wants to help. Whether you are self-employed or are an employee, you may be able to deduct certain expenses for the part of your home you use for business despite the general denial of business expense deductions for the home. Not everything is deductible. The first criterion you must meet is that part of your home must be
used regularly and exclusively as one of the following: 1. The principal place of business for your trade or business; 2. The place where you meet and deal with your patients, clients, or customers in the normal course of your trade or business; or 3. In connection with your trade or business, if you use a separate structure that is not attached to your home. What can you deduct? In general most expenses paid to lease, maintain and repair the home are deductible including:
Business portion of real estate taxes; Deductible mortgage interest; Rent; Casualty losses; Utilities; Insurance; Depreciation; Maintenance and repairs.
Caution: IRS Topic 509 prohibits you from claiming certain expenses; "You may not deduct expenses for lawn care in general or for painting a room not used for business." How much can be claimed? Not 100% of the above expenses can be deductible mainly because only portion is used in the business and the rest is merely personal expense. To figure the deductible portion you should divide the number of square feet used for business by the total square feet in your home (if the rooms are approximately the same size, divide the number of rooms used for business by the total number of rooms in your home) and then multiple this % by the total amount of expenses listed above. Business Use of Care Have you ever been asked to use your car for your job? It's Payback time. Now you can save tax money by claiming business use of your car. How does it work? Simple. You can choose one of two methods: Standard mileage rate: the way this method works is that you multiple the actual business miles you have driven your car in the tax year by the standard miles allowance (for 2009 it's 55 cents per mile). Actual expense method. First, you divide the amount of business miles driven in the tax year by the total miles driven in the same period (you do that to determine the business portion of the car use). Then, you multiple that portion by the expenses actually paid to operate the car (include gas, oil, repairs, tires, insurance, registration fees, licenses, and depreciation (or lease payments). Caution: IRS Topic 510 restricts the use of the standard mileage method in some cases; "To use the standard mileage rate, you must own or lease the car; the car must not be used for hire, for example as a taxi; you must not operate five or more cars at the same time, as in a fleet operation; you must not have claimed a depreciation deduction using the Modified Accelerated Cost
Recovery System (MACRS) on the car in an earlier year or any method other than straight-line for its estimated useful life; you must not have claimed a Section 179 deduction or the special depreciation allowance on the car; and you must not have claimed actual expenses after 1997 for a car you leased. You cannot use the standard mileage rate if you are a rural mail carrier who received a "qualified reimbursement". Conclusion When you prepare your 2009 tax return, make sure you carefully read this article to determine which of the tax deductions mentioned in it could be applied to you. Using one or more of the deductions could lead to a much bigger refund not only this year but in many years to come.
http://TaxTreasure.com - As real people we understand that online taxes should be easy, simple, fast and maybe, maybe even fun (when, lets no go overboard). Because of that we at TaxTreasure.com developed a unique approach to online tax preparation which takes the hassle and tension off the table. We have designed a REAL-LIFE-EVENTS solution that does not bores you with endless questions and scary forms, but instead, ask you to simply tell us: "what happened to you this year"? All you have to do, is to tell us (or choose from our event list) what really happened to you, and we in return, provide you with valuable information that will help you to better understand what, where and when to report. We will also suggest how to save on taxes based on the events that you went through this year and advice you on how to maximize your refund in light of those events.
Article Source: http://EzineArticles.com/?expert=Tal_Rozen
==== ==== Pay Zero Taxes Like The Wealthy Do http://tinyurl.com/beat-irs ==== ====
