Looking for something specific? Enter one or more keywords and search our entire site.	900 N. Kings Highway, Cherry Hill, New Jersey 08034 856.667.4100 · 215.563.0276 · Fax: 856.667.3652 Weekly Tax Tips 2004 Tax Tips Archive December 27th - Know which dependents will cut your tax bill For any number of reasons, you could find yourself opening your home to relatives in need. In some cases, the guests could become fairly permanent occupants. December 20th -There are new rules for donating vehicles to charity If you donate a used vehicle to charity, you are allowed to take a tax deduction if you itemize deductions on your tax return. Be aware of the big change in the deduction rules, thanks to the recently signed American Jobs Creation Act of 2004. December 13th -Business Alert: The depreciation rules are changing If you own a business, you need to be aware of the recent changes that have been made to the rules for depreciating business equipment purchases. December 6th - Act quickly if you want to cut your 2004 tax bill Here are eight year-end actions you might consider if you want to lower your taxes for 2004. November 29th - Know the rules for business gifts The holiday season is a time when businesses like to give gifts to their customers and suppliers. This is a good way to reinforce valuable business relationships and establish goodwill. November 22nd - Don’t miss the deadline for IRA distributions If you’re over age 70½, you could be facing an important tax deadline. You have until December 31st to take this year’s required minimum distribution from your traditional IRA accounts. November 15th - The gift tax exclusion – use it or lose it! Did you know that this year you can give gifts of up to $11,000 to as many individuals as you want without being liable for gift tax? Normally, any gift you make counts towards your lifetime exemption from gift and estate taxes. That’s so you don’t just give away your estate shortly before death to avoid estate taxes. November 8th - Remember to use up the funds in your flexible spending account Many companies offer a flexible spending account (FSA) as part of their employees' benefit package. If you participate in an FSA, you are allowed to set aside pre-tax dollars from your paycheck to pay for certain unreimbursed health costs, such as co-pays or deductibles. The major drawback is that you forfeit any unused dollars in your account at the end of each plan year. November 1st - The American Jobs Creation Act of 2004 could have tax breaks for you Tax cuts, tax incentives, and tighter reporting requirements for businesses and individuals. They’re all part of the American Jobs Creation Act of 2004 — and chances are good many aspects of this new law will affect you. October 25th - Make the right tax choices for your U.S. savings bonds When you own Series EE or Series I savings bonds, you have a tax decision to make. Both types of bond earn interest monthly. Usually, you’ll choose to defer paying any taxes on the interest until the bond reaches final maturity or you redeem it, whichever comes first. October 18th - Don’t let the “nanny tax” catch you misbehaving As year-end approaches, make sure you’re not caught by the so-called “nanny tax.” If you have a household employee, you could be liable to pay state and federal payroll taxes. You might also have to withhold payroll taxes from your employee’s wages or pay them yourself. October 11th - Factor new tax law into your tax planning On October 4, 2004, President Bush signed the Working Families Tax Relief Act of 2004 into law. It’s the fourth tax law in as many years. As you consider ways to minimize your tax bill for 2004 and 2005, be sure to factor this latest round of tax revision into your planning. October 4th - Get educated about Section 529 plans If college costs are in your future, you should know about the benefits of Section 529 plans. They offer a tax-advantaged way to put away cash for college expenses or to prepay tuition expenses. Also known as College Savings Plans or Qualified Tuition Plans, they are now offered by every state and by many colleges. September 27th - Does it matter who owns your life insurance policy? Yes — it can be important who owns your life insurance policy. When you die, the proceeds of your policy will go to the beneficiary you specify. But if you are the policy owner, the value of the policy will be added into the value of your estate that is used to determine estate taxes. September 20th - The government might pay you to save Don’t automatically rule out making a contribution to your retirement savings just because your 2004 income is low. Under the right circumstances, you could finish up with $2,000 added to your retirement savings with an outlay of as little as $1,000. The government will contribute the extra $1,000 in reduced taxes just to encourage you to save. September 13th - Could you use a Coverdell ESA? A Coverdell Education Savings Account may not offer the most generous tax breaks, but it could be right for you or someone you know. The big advantage is flexibility – you can use it for elementary and secondary school expenses, as well as college costs. That’s unusual among education tax breaks. Here’s an overview of how an ESA works. September 6th - Think taxes as you tune up your investment portfolio Now’s the time to review your investment performance and plan your year-end moves. As you identify winners and losers and decide what to hold and what to sell, here are some tax reminders. August 30th - Do you need a living trust? You’ve heard people talk about setting up living trusts as part of their estate planning. A living trust is a trust you set up while you’re still alive. You transfer ownership of your house, cars, bank accounts, and other assets to the trust. A trustee, usually you, manages the assets. When you die, the trust distributes the assets in accordance with your wishes. August 23rd - Consider tax-smart ways to fund your grandchild’s education Are you a grandparent wanting to fund your grandchild’s education? You’ll find several ways to do this, each with its own limitations and tax consequences. August 16th - Business equipment tax break ends soon Are you planning to buy new equipment for your business? If so, keep in mind that one of last year’s business tax breaks expires at the end of this year, and another lasts only through 2005. August 9th - Enjoy this improved deduction for education expenses Did you know that there’s an improved deduction for higher education expenses this year? The maximum amount has increased, and more taxpayers are eligible. It’s an above-the-line deduction, meaning that you can claim it whether or not you itemize. This year the maximum amount is $4,000, up from $3,000 last year. August 2nd - It's time for a six-month tax tune-up We’ve now reached the mid-point of the year and it’s a great time for a tax tune-up. With six months’ income and deductions under your belt, you should be able to make a fair estimate of your financial picture for the full year. By reviewing and making adjustments now, you have time to avoid unpleasant year-end tax surprises. July 26th - Home offices — when can you take a deduction? If you work at home, you’d probably like to take a tax deduction for your home office. Here’s an overview of what qualifies. July 19th - Business NOLs: What you need to know You’ve probably heard people throwing around the term “NOL.” It stands for “net operating loss” and refers to a tax operating loss incurred by a business. Generally, you have an NOL when your allowable deductions exceed your income from the business, subject to some technical adjustments. July 12th - Deduct the cost of finding a new job Are you looking for a new job? If you meet certain requirements, some of your job search expenses could be deductible, even if you don’t find a job. July 5th - Take a deduction for moving expenses Are you planning to move this summer? If your move is related to starting a new job, some of your moving expenses could be deductible. Here’s an overview of the basic rules. June 28th - Should your child have an IRA? Is your child planning to work at a summer job this year? If so, why not encourage him or her to set up an IRA? Oh sure — what teenager wants to put his summer earnings in a retirement account! But that need not be a problem. If you’re willing to provide the cash, your child can establish an IRA and get a head start on tax-favored retirement savings. Here’s how it works. June21st - Plan for a smaller refund Did you receive a big refund check from last year’s taxes? If so, you’re not alone. Many of us deliberately pay extra taxes throughout the year so we can enjoy a nice bonus early the next year. June 14th - Avoid problems if you donate your car to charity It sounds like a perfect solution. No more haggling over trade-in value when you buy a new car. Instead, you donate your old car to charity. You get rid of your vehicle and receive a tax deduction, and the charity gets a nice donation. Sometimes it works as smoothly as that. But you should do your homework to avoid possible problem areas. June 7th - Watch out for the AMT If you’re a middle-income taxpayer, a new tax threat could be stalking you. It’s the alternative minimum tax (AMT). It’s estimated that the AMT will affect about three million taxpayers this year, and unless Congress acts, around nine million more might have to pay the AMT in 2005. May 31st - Planning a wedding? Don't forget taxes If you're planning a summer wedding, here's some advice that can help you avoid headaches at tax time. If you take a new married name, contact the Social Security Administration to notify it of the change and to obtain a new social security card. May 24th - A vacation home can be a tax-saver You can enjoy a vacation home and cut your taxes — with some careful planning and a little discipline. The IRS rules can be complex and potentially restrictive, so a word of caution is in order as you plan the use of your vacation home. May 17th - Classify workers correctly If you have people working for your business, you may face the issue of whether to classify them as employees or as independent contractors. Classifying your workers as independent contractors generally saves you money. That’s because you avoid paying employment taxes and benefits on their behalf. May 10th - If you trade, you can defer taxes The tax law provides a valuable tax-saving opportunity to business owners and real estate investors who want to sell property and acquire similar property at about the same time. This tax break is known as a like-kind or tax-deferred exchange. It is also known as a Section 1031 exchange (the code section that provides for it). By following certain rules, you can postpone some or all of the tax that would otherwise be due when you sell property at a gain. May 3rd - Mistakes can be corrected Has this ever happened to you? You rush to get your income tax return in the mail only to discover a deduction you overlooked. Or you receive a corrected year-end statement for one of your investments a week after you dropped your return in the mail. Well, the good news is that you can correct your return for up to three years after you file your original return. April 26th - Traditional IRA, Roth IRA, or no IRA? This year you can contribute up to $3,000 to an IRA, or $3,500 if you've reached age 50. But after last year's tax cuts, is an IRA still a good investment? If so, should you choose a Roth or a traditional IRA? Here's a summary of the key issues to consider. April 19th - Track your remodeling costs If you sold your home tomorrow, would you have to pay capital gains tax? The answer could depend on where you live and how long you've owned your house. April 12th - Avoid penalties for late filing Does it look as if you might miss the April 15 filing deadline? Don't despair! There's still time to avoid a late-filing penalty — and you might be able to do it without filling out any forms. April 5th - Act fast or you'll lose your refund If you didn't file a tax return for the year 2000, you're not necessarily in trouble. In fact, you could be about to lose out on a nice refund check. The IRS reports that it is holding an astonishing $2.5 billion in refunds from the year 2000. Here's how the situation arose. March 29th - Cut pollution, and cut your taxes too Did you know you can be environmentally conscious and cut your taxes at the same time? You could qualify for special tax breaks if you buy a hybrid vehicle or an all-electric vehicle. March 22nd - Check out the new health savings accounts A new type of savings account is available this year. It offers some new tax advantages and promises to give you greater flexibility in paying for your unreimbursed medical costs. And it's open to anyone who signs up for a high-deductible health care plan. March 15th - Does this April 1 deadline apply to you? If you reached age 70½ last year, April 1, 2004, could be an important deadline. That's the last day you can take your required minimum distribution (RMD) for 2003 from your traditional IRAs. If you miss that deadline, the penalty could be a 50% excise tax on the amount you should have withdrawn. March 8th - Make your S corporation election by March 15 If you own a small business, you have until March 15, 2004, to choose S corporation status for this year. In order to become an S corporation, you'll need the unanimous approval of all shareholders. March 1st - Estate taxes will take a smaller bite in 2004 Fewer estates should be exposed to estate taxes this year, and for those that are, the bite should be smaller. That's because the top rate of estate tax falls to 48% for 2004. Perhaps more important for most people, your estate can now have a value of up to $1.5 million before estate taxes begin. February 23rd - Kiddie tax threshold increased for 2004 Beginning this year, your young children can earn more investment income before the "kiddie tax" kicks in. The kiddie tax rule applies to the investment earnings of a child under age 14. It says that income above a certain threshold amount will be taxed at the parents' top marginal tax rate. February 16th - Contribute more to your retirement savings this year The New Year brings new opportunities to save for retirement — something we all need to do. The contribution limits for a variety of tax-advantaged retirement plans increased on January 1st. New and old limits are shown in the box below. February 9th - Not all dividends are equal Last year's tax legislation sharply cut the tax rate you'll pay on most dividends. But not all dividends qualify for the new low rate. Whether you're restructuring your investment portfolio or just gathering information for your 2003 tax return, it pays to know your dividend types. February 2nd - Be diligent about saving your tax records You're probably getting ready to sort out last year's financial records and prepare for this year's recordkeeping. But what should you keep and what can you throw away? Here are some suggestions. January 26th - Know how your investment income is taxed The tax rates on some kinds of investment income changed drastically last year. Whether you're dealing with last year's taxes or planning for this year, you need to know how your investment income is taxed. Here's a quick review. January 19th - This credit is not just for children As you gather information for your 2003 tax return, don't overlook the child and dependent care credit. You might be eligible for this credit if you pay for child or dependent care so you can go out to work, look for work, or attend classes. January 12th - Mileage allowances and hybrid cars could affect your taxes Mileage rates increase. The standard mileage rates have increased for 2004, and more taxpayers can now use them. The standard mileage rate allows you to claim a fixed amount per mile, rather than keeping track of actual expenses for gas, repairs, service, etc. January 5th - Do you qualify as head of household? If you're single, it might be worth checking whether you qualify to file your tax return as head of household. The advantages: You'll enjoy lower tax brackets and a bigger standard deduction than single filers. [Business Information] [Home] "Tax Tips" are published weekly to provide useful tax information. Return to this site every week for helpful tax-cutting suggestions, tax reminders, and current tax information. The information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax-cutting information from time to time, please contact our office. We're here to help.
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