12/26/2005 - Business Gifts: Know the tax rules
The end of the year is a traditional time for business gift giving. Companies like to say thank you to customers, suppliers, and employees, and show their appreciation for the business relationship. Each business makes its own decision on who should receive a gift and how much to spend. But the IRS has a separate set of rules on how you must treat gifts for tax purposes.
12/12/2005 - There’s still time to make a tax-free gift
Did you know that you still have a few weeks to use your annual gift tax exclusion for 2005? This year, you can give up to $11,000 each to as many people as you want without adding to your gift tax liability. You can use this tax break in many ways: for example, in your estate planning, as part of an income-shifting strategy, or to fund a child’s education.
12/5/2005 - Changes are coming for hybrid tax breaks
Changes are ahead if you’re thinking of buying a hybrid vehicle. At the end of this year, the current tax deduction will be replaced by a potentially more valuable tax credit. And the IRS recently added two more models to the list of qualifying vehicles.
11/14/2005 - It’s time to review your investments
As year-end approaches, you should review your investment portfolio. Look for notable winners or losers, rebalance your portfolio between stocks, bonds, and other investments, and decide what to keep and what to sell.
11/7/2005 - Did you receive your 2004 tax refund?
You work hard to squeeze out every last deduction and credit, hoping for a bigger tax refund. You file your return. Then you move to a new address and forget all about that refund. Hard to believe? Yet it happened to over 84,000 taxpayers this year!
10/24/2005 - Avoid the rollover trap
Have you decided to roll over your balance in one IRA into another IRA? Or perhaps you’ve changed jobs and need to move the balance in your 401(k) plan into an IRA. The rules allow you to make these kinds of rollovers without paying taxes. But if you do it the wrong way, you could end up scrambling for cash.
10/17/2005 - Organize your 2005 tax records
Do you usually spend March and April scrambling to find last year’s tax records? Why not spend a little time this fall to organize your 2005 records? Next year you’ll be able to give your tax preparer a pleasant surprise, and perhaps you'll even earn yourself a faster refund.
10/10/2005 - Hurricane Katrina tax relief is signed by President Bush
Congress quickly passed a tax bill to bring relief to victims of Hurricane Katrina, and President Bush signed the bill into law on September 23, 2005. Most of the law’s provisions benefit victims of the disaster, but some tax breaks apply to all taxpayers. Here’s an overview.
10/3/2005 - It's time to review your 2005 tax situation
The beginning of fall is a great time to get a head start on your 2005 taxes. It’s too early to prepare your return, but you can review earnings and deductions and organize your records. With three months left in the year, there’s still time to make adjustments for maximum tax savings.
9/26/2005 - Prepare for college with a Section 529 plan
There are many tax breaks to help you save for college expenses, including tax credits, deductions, and tax-favored savings accounts. But some of the most generous and flexible are the "Section 529" plans. These plans come in two varieties. One type lets you prepay future tuition expenses, while the other is a savings account for higher education expenses.
9/19/2005 - Note the new standard mileage rates for the remainder of 2005
On September 9, the IRS announced an increase in the optional standard mileage rates for the last four months of 2005. These rates can be used in lieu of keeping track of actual vehicle expenses when conducting business, working for charity, moving to a new home, or traveling for medical care.
9/12/2005 - Tax savings in the new energy bill
Are you a homeowner or a future car buyer? If so, you could qualify for some new tax breaks from an unlikely source – the energy bill signed by the President on August 8, 2005. Several new tax credits take effect in 2006, intended to promote energy savings.
9/5/2005 - There's still time to change last year’s IRA contribution
Are you having second thoughts about last year’s IRA contribution? Perhaps you wish you’d made your contribution to a Roth IRA instead of a traditional IRA, or vice versa. Well, there’s still time to make a change even if you’ve already filed your tax return for last year.
8/22/2005 - Cut current taxes with an exchange
Imagine this scenario. You own several rental houses that have appreciated in value over the years. Now you’d like to invest in some land in a rapidly developing part of town. But to buy the land, you’ll need to sell the houses. And if you do that, you’ll face big capital gains taxes.
8/15/2005 - There are tax breaks for the disabled
The tax code tries to be helpful to the disabled. It excludes some income from tax, it allows special deductions, and it gives tax credits. It also offers tax credits to businesses for employing the disabled and improving disabled access. Here’s a quick review of some of the special tax breaks.
8/1/2005 - When you marry, don't overlook the paperwork
After a summer wedding and a dream honeymoon, it’s back to the real world. Along with thank you notes for the wedding gifts, there’s some other paperwork you should deal with. It’s smart to get your tax affairs in order before tax season is upon you.
7/25/2005 - How to correct a mistake on your return
What should you do if you find that you made a mistake on your tax return? Perhaps you find that you missed a big deduction. Perhaps you receive a late notice of income you earned. Or perhaps you should have itemized instead of taking the standard deduction. The answer is not to panic. Chances are you still have plenty of time to amend your return.
7/18/2005 - Now you have longer to use it before you lose it
Do you participate in a Flexible Spending Arrangement (FSA) at work? If so, you know all about “use it or lose it.” That’s the year-end scramble to spend the pretax dollars left in your account. But now there may be partial relief. Recent regulations may give you 2½ months longer to spend your money.
7/11/2005 - Use the summer months to update your estate plan
The summer months are a time for family get-togethers — weddings, graduations, family reunions. These events remind us of the changes in our lives due to marriages, births, deaths, and divorces. That’s why summer is a great time to review your estate plan and bring it up to date.
7/4/2005 - Give your child a job for the summer
If you run a family business, why not give your child a job for the summer? If you do it right, your child can earn some extra cash and gain good experience, and your business will receive a tax deduction.
6/13/2005 - Is the alternative minimum tax in your future?
Were you among the several million taxpayers who had to pay the alternative minimum tax (AMT) last year? Even if you escaped in 2004, keep reading! Unless the law changes, you could be among the millions more who’ll have to pay AMT in the years ahead.
6/6/2005 - Get medical insurance and tax savings too
A relatively new idea in health insurance offers tax breaks for participants and lower costs for sponsors. It’s called a Health Savings Account (HSA). With an HSA you get insurance against major illness plus the chance to pay for your smaller medical expenses with pre-tax dollars.
5/30/2005 - Maximize your 2005 retirement savings
Are you on track to contribute the maximum you can to retirement plans this year? The recent talk about social security reform has highlighted the need for personal savings in addition to the government programs. Here are a few tips and reminders:
5/2/2005 - Work-related education expenses can be deductible
Imagine these scenarios. You decide to take evening classes on a topic related to your work. Perhaps you want to improve your skills or just stay current with new developments in the field. Or you attend a seminar as part of the continuing education requirement for your professional license. If your employer won’t pick up the tab, can you claim a tax deduction for the education costs?
4/18/2005 - Should you be making estimated tax payments?
During the tax year you must pre-pay a substantial amount of the taxes you’ll owe for that year, or you risk being hit with an underpayment penalty. If you’re an employee, that’s usually not a problem. Your employer will withhold taxes from each paycheck. You can adjust the amount withheld so that it covers your total tax bill, even if you have extra income from moonlighting or investments. But if you’re self-employed or retired, you might need to make estimated tax payments.
3/14/2005 - Be aware of these business tax credits
Business tax credits are valuable because they provide a dollar-for-dollar offset to the taxes you owe. Some business tax credits are specific to certain industries, but others are more generally applicable. Here are a few credits that might be available to your business. These include three credits related to hiring workers, two to improving buildings, and one for providing employee pensions.
3/7/2005 - There’s still time to cut your 2004 tax bill
Are you still dealing with your 2004 tax return? Do you owe a bigger tax bill than you expected? Are you missing a tax break because your adjusted gross income is too high? Would you like a bigger refund? Don’t despair. You might still have time to make some changes. For example:
2/28/2005 - Teachers qualify for special tax savings
If you’re a teacher, you probably dig into your own pocket from time to time to buy badly needed classroom supplies. Late last year, Congress extended a tax break that allows you to deduct some or all of this type of expense. The deduction had expired at the end of 2003, but it’s now reinstated for 2004 and extended through 2005.
2/7/2005 - Time to check your withholding
The start of the new tax year is a good time to check your income tax withholding. It’s true that there were no major changes in tax rates or deductions for this year. However, there are still several reasons why you might want to adjust your withholding.
1/31/2005 - Did you forget your refund check?
Have you moved within the last year? If so, the IRS might be holding a refund check for you. Currently the IRS has over 87,000 refund checks that are undeliverable. At an average of $836 per check, that’s over $73 million waiting to be collected.
1/17/2005 - Tsunami relief donations give taxpayers an early deduction
If you’re thinking of making a donation to a charity to help in the tsunami relief efforts in Asia, you should consider doing so by January 31, 2005. President Bush just signed legislation that lets taxpayers claim a charitable contribution deduction on their 2004 tax returns for donations made during January 2005. (Of course, if you made a donation the last week of December, your contribution also qualifies for a 2004 deduction.)
1/3/2005 - A new Roth IRA rule benefits seniors
A change in the Roth IRA rules takes effect on January 1, 2005. This new rule, which applies specifically to people over the age of 70½, will make it easier for seniors to convert their traditional IRAs to a Roth IRA.
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