2009 Taxes Help | 2008 Tax Returns | Efile

Charity and Taxes

2009-03-27T21:03:00.000-07:00

The tax code in the United States contains many provisions to promote certain behavior. One area of behavior is the promotion of giving to qualified charities.

Giving To Charities – Tax Deductions and Such

In the rush to get tax returns prepared and filed, many people absentmindedly forget to include deductions for contributions to charities. If you itemize deductions on your tax return, this can be an expensive omission.

Pursuant to relevant provisions of the tax code, you can take significant deductions if you donate money or goods to a qualified charity. A qualified charity is one that is registered with the IRS as a 501c3 entity. The 501 designation refers to the relevant section of the tax code.

Importantly, not all charitable organizations are qualified with the IRS. You can go to the IRS web site and search through a list to see if a particular group is included. If they are not, red flags should go be raised.

Before claiming your deduction for donations, there are a couple of things to keep in mind:

1. Politics – You may feel strongly about certain political ideologies, issues or candidates. You can contribute to the causes, but you can’t deduct the contributions as charitable giving.

2. You can only deduct contributions actually made for the year in question. If you forgot to claim donations on your tax return for the 2004 year, you cannot claim them on a 2005 return. Instead, you should go back and amend the 2004 return.

3. If you make a contribution for a good or service, you can only deduct the amount you contribute which is in excess of the fair market value of the good or service. For instance, many charitable groups will hold auctions to raise money. If your winning bid for a two night hotel stay is $800, you can claim a deduction for the bid amount minus the normal cost. You cannot just write off $800.

4. In general, donations of stock or property should assigned the fair market value, not an arbitrary figure based on your opinion. Big ticket items should be supported with an appraisal.

5. The rules for donating automobiles have changed. The charitable group should have sent you correspondence regarding the amount it was able to sell the vehicle for. This is the amount you can deduct, not the blue book amount previously allowed. If the charity has not sent you anything, call them to get written confirmation. They know it has to be done under new IRS regulations.

Donating to charities is positive moral step. Make sure to claim your deductions to reap savings on your taxes.

Preparing Your Taxes Online

2009-03-27T21:01:00.000-07:00

When it comes to preparing our taxes, many of us could use some help. The following websites offer guidance and information that may assist you in learning about how to get the most out of filing your returns.

Fairmark.com

www.fairmark.com

Recommended by Forbes.com, Fairmark.com sia tax site dedicated to helping investors file their taxes correctly, offering a Tax Help Center and guidance when dealing with Roth IRAs, capital gains, and financing for college.

IRS.com
www.irs.com

Although not affiliated with IRS.gov, this site suggests online tax programs you can use for filing your return; info about extensions, deductions, and refunds; and Hot Topics, such as Tax Scams.

MSN Money

moneycentral.msn.com/tax/home.asp

MSN Money's Tax Estimator helps you prepare to file this year's taxes with information about tax law changes. A tax terms glossary helps you decide what forms you need to file, and tax attorney Jeff Schnepper answers questions you post in the Tax Corner message board.

TaxSites.com
www.taxsites.com

A directory of tax and accounting websites, TaxSites.com provides links for state tax agencies, legal information, organizations, and government sites for each state.

United States Tax Court

www.ustaxcourt.gov

The U.S. Tax Court lets you dispute tax-related offenses. This site describes the process the court uses, presents FAQs about what's involved when a case goes to tax court, and gives contact information for court offices and judges.

Yahoo! Taxes
taxes.yahoo.com

The giant search engine's Taxes page includes Tax Tips, a Tax Guide For Investors, Tax Education, and resources that can help users find an accountant or talk with others on the Yahoo! message board.

The Fair Tax | Why Is It Important to Me?

2009-03-26T19:07:00.000-07:00

The U.S. Federal Income Tax Code is a tax on the income of American companies and citizens enacted by the government. The U.S. Constitution gives Congress the power to impose taxes, duties, imposts, and excises.

The purpose of the Tax Code is to provide income for the operation of the government. The Tax Code is found in Title 26 of the U.S. Code of Federal Regulations (CFR).

Any U.S. citizen who has filled out a federal tax return knows how confusing the current U.S. Tax Code is. Additional layers of complexity appear if the taxpayer itemizes deductions, deducts home business expenses, or has a profit or loss due to investments.

When the convolutions of corporate tax law are considered, it is no wonder that companies hire teams of accountants to prepare their income tax returns.

What Is The Fair Tax?

The Fair Tax is a proposed income tax system intended by its founders to replace the current Tax Code. The Fair Tax Bill was proposed by Representative John Linder (R-GA) in July 1999 to the 106th Congress.

One definition of the Fair Tax is "a proposed change in United States tax laws to replace all federal personal income taxes, payroll taxes, corporate taxes, capital gains taxes, self-employment taxes, gift taxes and inheritance taxes with a national retail sales tax and monthly tax rebate to all households."

At the time of this writing, the Fair Tax proposes to apply a tax of about 23% on purchases. This purchase tax would replace the current income tax paid by Americans. Generally, those who spend or purchase more would pay more taxes. Conversely, those who spend less would pay less or even nothing.

Differences Between The Tax Codes

The current Tax Code is based on the income of a person or corporation. The proposed Fair Tax would be based on the purchases of a person or corporation. The expectation of the proposed Fair Tax is that those who are more wealthy generally purchase more, and will therefore would likely pay higher taxes than they do now.

Another major difference is the complexity of the two Tax Codes. As the Fair Tax Bill sponsor Representative Linder states on his website:

"I would also encourage everyone to review the Fair Tax, as it is only 132 pages, which stands in stark contrast to the more than 50,000 pages of tax code laws and regulations currently in effect."

Furthermore, the proposed Fair Tax Code would be administered by the States. Most states already enact a state income tax, and therefore have the infrastructure in place to collect the Fair Tax revenues. This would also mean greatly reducing, or even eliminating, the Internal Revenue Service (IRS)!

Monthly Tax Rebate Checks

Under the Fair Tax plan, each household would receive a monthly tax rebate check, paid in advance. The amount of the check would be estimated as the amount of Fair Tax owed on poverty level spending. The goal of the monthly rebate check is to prevent anyone from being taxed on household necessities, especially those under the poverty level.

Will The Fair Tax Provide Enough Government Income?

The feasibility of the proposed Fair Tax is the topic of endless discussion. On one hand, the entire taxation process would be greatly simplified. Wealthy persons and corporations would pay a greater share of taxes.

On the other hand, a Tax Code change of this magnitude will require massive reeducation of the public. People are resistant to change, and would no doubt cry foul at being denied many of their usual tax deductions.

Finally, the only way to accurately assess the effectiveness of the proposed Fair Tax Code is to see it in action over a period of years. That does not look likely in the very near future, although the Fair Tax proposal is gaining support.

Tax Your Brain

Whether you are for it or against it, you must agree that the proposed Fair Tax would represent a dramatic shift in U.S. taxation policy if enacted. Proponents and opponents of the Fair Tax Bill will no doubt continue to generate tax estimates that are supportive of their arguments.

It is up to you as an American taxpayer to become educated on the Fair Tax Bill. Determine whether the proposed changes and tax payment methods would benefit you and the country more than the current system.

Once you've made a decision about the proposed Fair Tax, contact your Senators and Representatives and tell them how you feel about it. Regardless of the tax system in place, you are still paying their salary.

The website below provides free information about income tax preparation tips and tax assistance articles and resources.

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About the Author:
Doug Smith provides free income tax tips and other income tax preparation assistance at http://IncomeTax.CareerDictionary.com . Visit today - it's never too late to find another deduction!

Tax Software Reviews

2009-03-22T19:09:00.000-07:00

The medium is the message, it's sometimes said. Think of Franklin D Roosevelt and his “fireside chats” to the nation. In a pre-TV era, the radio was the perfect medium to “have a conversation with the American people”. He could get his reassuring message right into folks' homes, and become a part of the family. A different medium, for example a grandstanding speech, wouldn't have got the message across as effectively as an intimate radio chat. The medium most surely was the message.

But let's come back to the 21st.century and something close to all our hearts: tax preparation, or, to be exact, tax preparation software. Unfortunately, this particular medium seems to be giving out mixed messages, although software programmers and vendors would reassure us that we can complete tax programs quickly and accurately, click “print” and produce a tax return destined to meet the IRS's requirements.

Seems clear enough, so why the mixed messages? One of the main criticisms leveled at tax preparation software is its “one-size-fits-all” approach. Its critics, businessmen in the main, ask how it's possible to condense an extraordinary number of codes and regulations into a half-hour interview process. Irrespective of the claims made by software programmers, critics point out that only the most general set of credits and deductions can be incorporated into tax software, which means that you'll be the loser. It's these sins of omission, or the questions they don't ask, which work to your detriment and the advantage of the IRS.

Imagine this scene for a moment. A medium is holding a séance. She's trying to put you in touch with the other side who also want to get in touch with you. She'll ask leading questions and, reading between the lines, make statements general enough to apply to anyone, but those present will interpret them as applying to themselves as unique individuals. A “plant” in the audience will bolster her authenticity further and convince you that the entire process will bring you good news from the other side.

How a charlatan operates in a séance is exactly how critics see the operation of tax preparation software. These programs are designed for all businesses but with the same basic tax deduction questions being asked, albeit modified slightly, in every case. You might think you're being treated as a unique individual as you're asked to state the nature of your business before beginning the interview process. This isn't the case, however, even though software vendors try and plant in your mind that, by purchasing their top-notch programs, you will be able to check all credits and deductions.

Believe that, say the critics, and you'll get what you think is good news in terms of credits and deductions. But, as with the self-fulfilling prophecy of the charlatan medium, you're only getting what you're looking for. You need to think “out of the box”, and hire the services of a professional who really can read between the lines to ensure you don't overpay your taxes. So, the critics' verdict on tax preparation software as a medium? - “I'll be getting in touch... with my accountant”.

For some folks, then, all tax preparation software is bad. If you think they're good then you're thinking yourself out of thousands of dollars. An active investor, running his own business and having a substantial portfolio of stocks, might disagree. There are very good programs available, either web- or PC-based, which can handle multiple entries very effectively. Only in exceptional circumstances, that is in unique tax situations, would it be necessary to get a tax accountant to do the job for you. For investors, the software or medium is essentially good, it's more a question of “means well but not quite all there”.

If you're filing straightforward tax returns, and perhaps you're in receipt of dividends from mutual funds and W-2s from your job, tax preparation software is readily available to calculate your returns quickly and accurately. Your returns are calculated, and you're informed of any possible problems. Good tax software will enable you to e-file a federal and state return for less than $16. You can happily tick the boxes as a unique individual who's not in a unique tax situation.

Things can turn very ugly, though, when the tax preparation software you're using doesn't provide easy-to-follow, in-depth help for the new or relatively inexperienced tax filer. The help needs to be as jargon-free as possible, and a good program will provide the necessary tools and capabilities enabling you to complete the return accurately. This means the program should have helpful drop-down menus and icons, together with a quick and easily-accessible online service. The best-documented programs should offer a combination of helpful customer service and useful financial tax tips and advice.

Unfortunately, using some of the free tax preparation software available, suitable mainly for folks filing simpler tax returns with adjusted gross income of $34,000 or less, can be a self-defeating exercise. While some are fast and easy to use, with both interview-style and forms-based input, others are not. When you buy tax software the vendor often provides technical support to the purchaser, but this key element is missing in the free software. Users of free software tend to be less computer-literate and are, therefore, more likely to find things turning ugly. Their verdict on this indifferent medium? - “means well but has lost the plot”.

So, good, bad and ugly: the messages are mixed for tax preparation software. Take out the ugly, and most would agree that this method of filing your tax return is fast, accurate and practically error-free. For some die-hards, though, this software will never be the medium of choice for communicating with the IRS.

Tax Help

2009-03-18T22:44:00.001-07:00

There are many websites on the Internet today that gives much needed income tax help for those who have no idea of what's going on during tax time. Income tax is a tax paid on income, unfortunately no matter how little it is. It's paid by employees and people who are self-employed and may also be payable if you are not working but you have an income, such as a retirement pension or an occupational pension. Not all types of income are taxable and it will seldom be the case that all of your income is taxed. There is no minimum age at which a person becomes liable to pay income tax. What matters is your income. If this is below a certain level, no tax is payable. There is actually no single definition in tax law of income. Income tax law divides various types of income into schedules. If an item comes within a schedule it counts as income and income tax must be paid on it. The way the tax must be paid will depend on which schedule it falls into. The most common schedules are Schedule E for employees and Schedule D for the self-employed.

There are five main steps in calculating income tax:-

Step 1: Add together all your yearly income, including social security benefits, income from renting out accommodation, wages, occupational pension, interest from bank and building society accounts.

Step 2: Take off any income which is exempt from tax. Calculate whether you can claim tax relief on any of the money you have spent over the year (tax relief usually applies to people who are self-employed and have to buy items for the business). Deduct this tax relief. This leaves income on which tax may be payable (taxable income).

Step 3: Work out which tax allowances you are entitled to. You will be entitled to a personal allowance (plus age related additions if appropriate). These allowances are deducted at this stage in the calculation.

Step 4: Multiply the taxable income by the correct tax rate. This gives the tax due to be paid that year, unless you are entitled to married couple's allowance for over 65 year olds.

Step 5: If applicable, deduct the appropriate percentage rate of married couple's allowance for over 65 year olds.

Some income is exempt from income tax, which means that tax is never paid on this income. This income should therefore be put to one side before any tax calculation can be done. Examples of income which is exempt from tax include premium bond prizes, housing benefit, child benefit and profit-related pay. It is therefore necessary to check whether any income is exempt from tax before doing a tax calculation. For more income tax help, all the help you need in on the internet. The IRS itself can give you income tax help and answer any tax questions you may have.

Contact the IRS | Heart-Attack-Free Version

2009-03-18T22:42:00.000-07:00

We all love to criticize the IRS, don't we? It's easy to ridicule a huge organization of government bureaucrats who often seem to be Public Enemy #1.

Our negative attitude toward the IRS can lead to a strong desire to just ignore it altogether. But
self-employed people who ignore the IRS do so at their own peril.

So when it comes to providing free information about taxes, let's not throw the baby out with the bath water. The IRS does provide some excellent resources to help us make the best of a potentially bad situation.

If you need tax assistance and prefer not to pay for it, do not overlook these five ways to obtain help from the IRS:

1. The Internet
http://www.irs.gov

There's a wealth of information just for small business owners and self-employed people at: http://www.irs.gov/smallbiz

Here you'll find everything from how to obtain a federal business tax ID to a free 6-session streaming video presentation of the "IRS Small Business Workshop." Also known as the Small Business Self-Employed Online Classroom, you can access this directly at: www.irs.gov/businesses/small/article/0,,id=97726,00.html

If you prefer to attend an IRS small business workshop in person, check here to see what's available in your state: www.irs.gov/businesses/small/article/0,,id=99202,00.html

Need tax forms and/or their instructions?

Look no further than the IRS website:
http://www.irs.gov/formspubs/index.html

Here you'll find a boatload of links to every tax form imaginable, available as downloadable PDF files or in fill-in format. All form instructions can also be downloaded. http://www.irs.gov/formspubs/lists/0,,id=97817,00.html

The IRS has many free publications that explain virtually every major (and many minor) tax topics in great detail that can assist in any year's taxes or just simply 2008 tax help. Sure, IRS "pubs" are not always written in the most entertaining style, but, hey, remember the price. http://www.irs.gov/formspubs/lists/0,,id=97819,00.html

2. Telephone Hotlines.

Special toll-free numbers exist for the following:

-- To order forms & pubs: 800-829-3676 (in case you'd like to receive a paper copy via snail-mail)

-- To ask business tax questions: 800-829-4933

-- To ask personal tax questions: 800-829-1040

Use common sense when phoning the IRS: to avoid long wait times, don't call on Monday morning. And no matter when you call, be prepared! Write out your questions beforehand and have all relevant documentation in front of you, as well as a favorite book or magazine to read during the inevitable wait time. Stay calm; don't yell; treat the IRS employee like a human being and he/she will likely return the favor.

-- Need help with long-standing problems: 877-777-4778

-- Prerecorded messages on 140 topics: 800-829-4477

3. TaxFax Service.
You can receive most IRS forms instructions via fax by calling 703-368-9694 from your fax machine.

4. CD-ROM for Small Business.
This is known as "The Small Business Resource Guide CD-ROM", aka Publication 3207. It includes all the tax forms and publications needed to run a small business. Call 800-829-3676 to request a free copy.

5. Walk-In Offices.
Need some face-to-face tax help? For a complete list of IRS offices in all 50 states, including hours of operation and contact info, check out: http://www.irs.gov/localcontacts

Watch Out for Tax Return Email Scams

2009-03-18T22:40:00.002-07:00

The IRS has issued a warning regarding a phishing email scam and people claiming 2008 taxes help. The scam claims you are due a tax refund, but is really designed to obtain your personal information.

Tax Refund Email Scam

Phishing scams are designed to swindle you into providing private information that can be used to your detriment. This information typically includes things like credit card numbers, social security numbers, bank accounts and so on. This information is then used to open financial accounts in your name, a process otherwise known as identity theft. Frankly, it is a nightmare you do not want to be a part of.

The IRS is warning people about a tax refund email scam, which works like this. You receive an email purportedly from the IRS indicating you are due a tax refund. You are directed to click a link to visit an “IRS” page. On the page, you are asked to provide your social security number, etc., so your account can be accessed. This email is fraudulent and designed solely for identity theft, not 2008 tax help at all.

IRS Does Not Use Email

The IRS does not use email to contact taxpayers. It certainly doesn’t use it tell you about tax refunds. The IRS only communicates with taxpayers through the mail or by telephone. Do not fall for this scam!

Are You Owed A Refund?

But what if you really are owed a tax refund? Well, the IRS is certainly not going to contact you by email to tell you. Think about it. The IRS doesn’t HAVE your email address, so how would it send you a message?

If you think you may be owed a tax refund, the best option is to pick up the phone and contact the IRS. You can reach the agency by calling 1-800-829-1040.

Whatever you do, never respond to an email from the Internal Revenue Service because they are fake. Don’t get suckered!

Preparing Taxes Online Help

2009-03-18T22:40:00.001-07:00

When it comes to preparing our taxes, many of us could use some help. The following websites offer guidance and information that may assist you in learning about how to get the most out of filing your returns.

Fairmark.com
www.fairmark.com

Recommended by Forbes.com, Fairmark.com sia tax site dedicated to helping investors file their taxes correctly, offering a Tax Help Center and guidance when dealing with Roth IRAs, capital gains, and financing for college.

IRS.com
www.irs.com

Although not affiliated with IRS.gov, this site suggests online tax programs you can use for filing your return; info about extensions, deductions, and refunds; and Hot Topics, such as Tax Scams and 2008 tax help.

MSN Money
moneycentral.msn.com/tax/home.asp

MSN Money's Tax Estimator hepls you prepare to file this year's taxes with information about tax law changes. A tax terms glossary helps you decide what forms you need to file, and tax attorney Jeff Schnepper answers questions you post in the Tax Corner message board.

TaxSites.com
www.taxsites.com

A directory of tax and accounting websites, TaxSites.com provides links for state tax agencies, legal information, organizations, and governmment sites for each state.

United States Tax Court
www.ustaxcourt.gov

The U.S. Tax Court lets you dispute tax-related offenses. This site describes the process the court uses, presents FAQs about what's involved when a case goes to tax court, and gives contact information for court offices and judges.

Yahoo! Taxes
taxes.yahoo.com

The giant search engine's 2008 Taxes help
page includes Tax Tips, a Tax Guide For Investors, Tax Education, and resources that can help users find an accountant or talk with others on the Yahoo! message board.

The 43 Cent Mistake | Efile

2009-03-18T22:39:00.000-07:00

When it comes to filing your tax return, spending 43 cents could be the biggest mistake you ever make.

Millions of taxpayers make the mistake of putting their income tax return in a regular letter-sized envelope, sticking on a 43 cent stamp, and placing the envelope in the mailbox.

And millions of taxpayers "get away" with this mistake year after year.

Why do I say that putting your tax return in the mailbox is a mistake? Let me explain.

Every year, a small percentage of mail doesn't get delivered. The U.S. Postal Service doesn't like to admit this, but it's true.

Furthermore, even if your tax return gets delivered to the IRS, every year a small percentage of tax returns get lost by the IRS.

Don't believe me? I'll never forget the day one of my clients showed me a letter he received from the IRS:

"We regret to inform you that we received your return.... but have lost it."

Believe it or not, this actually happened!

So my question to you is this: What are you doing to do if this happens to you?

If your tax return doesn't get delivered, or if it gets delivered but is subsequently lost inside the mammoth IRS, what are you going to do to prove that you actually mailed the return?

Just contacting the IRS and saying, "Well, I mailed it on time. I know I did!" isn't going to prove anything. And the burden to prove you mailed the return on time will rest on your shoulders.

You have two ways to solve this potentially dangerous problem:

OPTION #1: File your return electronically.

There are many benefits to e-filing:

-- Accuracy. In order for a return to get e-filed it must pass several strict accuracy tests, thereby significantly reducing the chance of human error. E-filed returns are subject to this level of scrutiny at the point of origination.

-- Security. The filer creates his own electronic signature, resulting in a truly paperless experience.

-- Speed. If you're due a refund, it can take 6-8 weeks with a paper return. Combined with direct deposit, your e-filed return will generate a refund in as little as 10 days.

-- Proof of acceptance. This is the benefit I want you to focus on right now. When you e-file your return, you receive an electronic acknowledgement within 48 hours that the IRS has accepted your return.

Bingo! Now you have proof positive that the return was filed. 'Nuff said?

E-filing is rapidly becoming the filing method of choice. But the majority of returns are still filed on paper, so here's a second way to avoid the "missing return" dilemma.

OPTION #2: If you're a "paper filer", go to the post office and spend a measly $4.05 to send the letter via Certified Mail, Return Receipt Requested.

Doing this will accomplish two very important things:

1. Certified Mail (which costs $2.40) provides the proof that the return was mailed, and that it was mailed on time, on or before the due date.

According to the IRS, a paper return is filed on time if it is mailed in an envelope that is properly addressed and postmarked by the due date. When you use Certified Mail, you will get a receipt postmarked by the postal employee, and the date on the receipt is the postmark date.

So, should the return get lost by the IRS, or if the IRS questions whether you mailed it on time, you will have written proof.

Plus, every piece of Certified Mail is assigned a tracking number which can then be traced by the U.S. Postal Service should a problem arise.

2. Return Receipt provides another level of insurance. For an extra $1.85, when the letter is delivered, the IRS must sign or stamp a receipt that documents the date of delivery. This receipt then gets mailed back to you, so you now have the written proof that the IRS received it.

Technically, you only need to send the return via Certified Mail to prove that it was mailed on time. But I really like the Return Receipt as well -- it gives you that extra "peace of mind" to know that the IRS received it. And you'll know exactly what day it was received. This is the proof of delivery.

So don't run the risk of having your tax return get lost in the mail. And don't run the risk of having your tax return get lost in the piles and piles of paper that flood the IRS each year.

Think about it. Well over 100 million personal income tax returns are filed with the IRS every year, and the majority of them are still prepared on paper and mailed by the U.S. Postal Service. You won't get credit for that charitable deduction if your returns are still at the post office.

The U.S. Postal Service and the IRS are staffed by hard-working people who are only human. People make mistakes. To greatly reduce the chance of a mistake being made with your return, don't you make the mistake of just putting your tax return in the mailbox.

Instead, e-file it, or take it to the post office and send it Certified Mail, Return Receipt Requested. It could be the best $4.25 you ever spent!

General Help With 2008 Taxes

2009-03-18T22:38:00.001-07:00

We all know that preparing your taxes can be painfully stressful. In many cases, it just makes sense to get some tax help with them.

Save Me From This Misery!

When it comes time to file taxes, you can look to software or a real live person. In this article, we are going to focus on living people, to wit, the tax professional. You might be surprised to learn there are different types of assistance out there.

Tax Preparer

Generally, tax preparers have the least amount of experience when it comes to filing taxes. Tax preparers are individuals that are trained for the job or pick up the knack over time. An example of a huge collection of prepares would be the people that work at H&R Block. The advantage of using a tax preparer is they are very cheap. Just keep in mind that you get what you pay for.

Enrolled Agents

The IRS actually licenses certain individuals if they pass scrutiny with the agency. Unlike tax preparers, an enrolled agent can represent you at an audit. Enrolled agents are a step up from tax preparers, but the quality of work and knowledge varies from agent to agent. Some can be excellent because they have an interest in the work and stay on top of changes. Others are less impressive.

CPA

The Certified Public Accountant goes through a hellish process to obtain their license. Getting licensed as a CPA requires significant study and the licensing test is absolutely brutal. If you have a unique or complex financial situation, you want to use a CPA to do your taxes. In fact, you should use a CPA throughout the year to not only prepare taxes, but plan to avoid paying as much tax as possible.

CPAs are expensive with hourly rates in the $200 to $300 range. They can, however, be worth their weight in gold and a few of them are pretty heavy. When picking a CPA, you want to find a proactive one. A proactive CPA is going to talk to you about your life and finances. They are then going to make suggestions to significantly lower your tax bill. The savings typically far outweigh their fees, and you’ll be glad you hired them.

So, who should you pick? The answer is entirely dependent upon the sophistication of your finances. If you are salaried employee earning $50,000 a year, you don’t need a sophisticated tax planner. If you are a small business owner with three businesses, it is time to find a CPA.

Tax Deductions for Charitable Contributions

2009-03-18T22:36:00.000-07:00

The tax code in the United States contains many provisions to promote certain behavior. One area of behavior is the promotion of giving to qualified charities. This is only MY opinion based on research. I am NOT a tax adviser so please double check with your tax professional.

Giving To Charities – Tax Deductions and Such

In the rush to get tax returns prepared and filed, many people absentmindedly forget to include deductions for contributions to charities. If you itemize deductions on your tax return, this can be an expensive omission.

Pursuant to relevant provisions of the tax code, you can take significant deductions if you donate money or goods to a qualified charity. A qualified charity is one that is registered with the IRS as a 501c3 entity. The 501 designation refers to the relevant section of the tax code.

Importantly, not all charitable organizations are qualified with the IRS. You can go to the IRS web site and search through a list to see if a particular group is included. If they are not, red flags should go be raised.

Before claiming your deduction for donations, there are a couple of things to keep in mind:

1. Politics – You may feel strongly about certain political ideologies, issues or candidates. You can contribute to the causes, but you can’t deduct the contributions as charitable giving.

2. You can only deduct contributions actually made for the year in question. If you forgot to claim donations on your tax return for the 2004 year, you cannot claim them on a 2005 return. Instead, you should go back and amend the 2004 return.

3. If you make a contribution for a good or service, you can only deduct the amount you contribute which is in excess of the fair market value of the good or service. For instance, many charitable groups will hold auctions to raise money. If your winning bid for a two night hotel stay is $800, you can claim a deduction for the bid amount minus the normal cost. You cannot just write off $800.

4. In general, donations of stock or property should assigned the fair market value, not an arbitrary figure based on your opinion. Big ticket items should be supported with an appraisal.

5. The rules for donating automobiles have changed. The charitable group should have sent you correspondence regarding the amount it was able to sell the vehicle for. This is the amount you can deduct, not the blue book amount previously allowed. If the charity has not sent you anything, call them to get written confirmation. They know it has to be done under new IRS regulations.

Donating to charities is positive moral step. Make sure to claim your deductions to reap savings on your taxes. See more 2008 taxes help here.

2008 Taxes Help

2009-03-14T13:39:00.000-07:00

So I needed some help doing my 2008 taxes but could not find much. If you are like me, then you might be wondering where to get some detailed help. Seems that no matter who I spoke to for 2008 taxes help, each person told me a different variation of what needed to be done.

The 2008 taxes codes are just too complicated for me. Unfortunately, many of the same 2008 tax help advisers are also the same ones or affiliates of other financial products that are closely tied to doing tax preparations; such as financial investments so that people can contribute year end to their IRA in order to get the deduction. So, this is disappointing, to say the least.. makes me wonder if those tax professionals really are trying to help me get my 2008 taxes lower or if they want my tax burden to stay rather high so that they can sell me on offsetting it with IRA contributions. And of course, they get nice hefty commissions from those products.

Like many of you, I have a unique tax situation in that I am self employed and also own my own corporation. Aside from this I am also a 50% owner in another corporation. Aside from this my spouse works and is salaried and has paid in to FICA etc from each check throughout the tax year 2008. Also like a lot of you guys, our income went down drastically for 2008 tax year. Still, would like some honest advice and some questions answered without affiliations slanting the advice. I thought about trying a PC program such as this one below because it is download-able instantly and so that means that I don't have to run out to Best Buy and then come back home just to do my 2008 taxes. Has anyone tried this and if so, is it worth the $45 bucks?

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2008-04-04T20:27:00.000-07:00

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