Queercents

That big day in April is lurking around the corner and no it is not April 13th it is the day you pay your dues to the IRS. If you want to put yourself in an even worse mood you may not want to look at this calculator. With this cool app you can find out how many millionaires pay a lower effective tax rate than you. This is a calculator that can either tell you are paying too much in taxes or need a new accountant. Better yet, it may be saying you might need to get out and vote this next election. All you have to do is enter your Wages and Salary and Federal Income Tax Paid or select your tax rate. It was too big to put on the homepage of our site but click more to view. Read the rest of this entry »

As a question that comes up constantly, these are the definitions per the IRS which will hopefully clarify questions you may have.

The period of limitations is the time in which you as the taxpayer can amend your tax return to claim a credit or refund, or the IRS can assess additional tax.  Unless otherwise noted, the years refer to the period after the return was filed.  Returns filed before the due date are treated as filed on the due date.  Also note that you should retain copies of your previously filed tax returns.  They help in preparing future returns and make computations if you need to file an amended return.

1. If you owe additional tax and situations (2), (3), and (4), below, do not apply to you, keep records for 3 years.

2. If you do not report income that you should report, and it is more than 25% of the gross income shown on your return; keep records for 6 years. Read the rest of this entry »

There are four major areas that you should always keep accurate tracking of your outside expenses, which include: travel, entertainment, gifts, and transportation.  Below is a synopsis from Publication 463 of the Internal Revenue Service.

Travel: All of your travel costs should be kept separated for travel, lodging, and meals.  Travel costs include: car rental, airline, fuel, taxis, tips, etc.  However they should not be categorized together as one large amount but separated out into separate subcategories.  Part of the key in keeping accurate expenses is the date/time that you left for your trip, as well as the location to/from, as well as any other destinations in between.  Finally, what was the purpose of the trip, which is essential in determining whether or not it was considered for business or personal purposes.

Entertainment: Regarding the cost of entertainment, this is only available at a 50% tax deduction, however when tracking for accounting purposes, it is charged at a 100% expense.  As with travel, entertainment expenses must be more detailed to include not only the date, amount, location, what the expense was for, but also the purpose of the expense, i.e. you were having a meal with a potential client, as well a what type of business was discussed.  Note that for business meals, the business owner or employee must have been present. Read the rest of this entry »

You can claim the cost of your child’s summer camp as a dependent care expense if:

• the camp is essentially providing child care so that you and your spouse can work (or look for work),
• it is a day camp (sleepover camps are considered a luxury), and
• the child is under 13.

You can claim expenses of up to $3,000 for one child or $6,000 for two or more children.

The expense claimed is limited by the lesser of the earned income of the two spouses. For example, if one spouse’s annual income is $5,000, you cannot claim the full $6,000 expense for two children.

The claim is made on line 48 of the 1040. You must include IRS Form 2441: Child and Dependent Care Expenses.

The tax credit received is 20% of the dependent care expense if your Adjusted Gross Income is greater than $43,000. The percentage credit rises if the AGI is lower. Read the rest of this entry »

It’s amazing the amount of clutter we collect, and with the change in the economic conditions and the frugality everyone has been dealing with for the past 2 years, however it’s important to always remember that there are always others who often could use the things that we have stored away in the back of cabinets, deep in closets, boxed up in various storage units across this great land of ours.  It’s always amazed me the amount of money people pay to use storage units and often forget what they even have.  This is an excellent time to consider getting rid of those storage units, saving some money, and adding to your tax deductions at the end of the year when you file your 2009 taxes.  Above all else, these items must be donated to a 501(c)3 organization recognized by the Internal Revenue Service for the deduction.  No if’s, and’s or but’s are available.

Regarding the donation and household items, they must be in good used shape at a bare minimum.  That means that you could still wear them or use them regardless of whether you think someone less fortunate would find value in them.  However if you are claiming an item to be of at least $500 in value, it must be accompanied with a qualified appraisal for documentation purposes.

When donating cash of any dollar amount, you must have a receipt on behalf of the organization receiving the funds.  If you write a check, then the cancellation copy of that check will suffice, with the date, amount, and the name of the charity associated with the donation.  The same for credit card donations.  However, it’s important to remember that the charity should also acknowledge your donation in writing for your tax filing. Read the rest of this entry »

If you use a portion of your home for business purposes, the option of a home office deduction is available meeting specific requirements as stated by the IRS.

1. The area in your home must be your principle where conduct your business and not used for ANY other purpose.

2. You see clients, patients, customers, etc. during your normal business hours at this location.  The location doesn’t have to be a separate building but must be used in connection with your business.

3. You utilize the location for storing inventory, product samples, etc.

4. The location is used as a rental property, home day care facility, etc.

How do you claim your home office deduction? It’s all based upon the percentage of the home that you use for business purposes only.  Also your deduction is limited if your gross income from the business is less than your total business expenses.  Such expenses that are available for deduction include: utilities, property taxes, and dedicated telephone line(s) which can be deducted at 100%. Read the rest of this entry »

Gideon Alper publishes the Gay Couples Law Blog. The blog discusses new developments in same sex family law and estate planning. He lives in Atlanta, Georgia, and you can email him at gideon@galperlaw.com or follow him on twitter. These are his words…

When paying federal taxes, it can pay to be gay.

The IRS doesn’t recognize gay marriage because of the Defense of Marriage Act. Even if you’re officially married in one of the states that allows it, you still have to file as single for your federal taxes.

This unequal treatment, however, lets gay couples take advantage of their single-filer status by using tax-avoidance techniques that married straight couples, who have to file jointly, can’t use.

Today I’m going to focus on just one of these techniques: deferring the recognition of gain on the sale of your property. Read the rest of this entry »

Most all businesses were hobbies at one point or another, but the question becomes where does it draw the line?  According to the IRS. Section 183 (the hobby loss rule) limits the amount of of deductions when an activity is not engaged in for profit.  Yes there is a distinct difference between the two, and this will hopefully explain it what you can deduct as a hobby expense.

Specifically, ask yourself these questions provided by the IRS:

• Does the time and effort put into the activity indicate an intention to make a profit?
• Do you depend on income from the activity?
• If there are losses, are they due to circumstances beyond your control or did they occur in the start-up phase of the business?
• Have you changed methods of operation to improve profitability?
• Do you have the knowledge needed to carry on the activity as a successful business?
• Have you made a profit in similar activities in the past?
• Does the activity make a profit in some years? Read the rest of this entry »

The IRS will be holding a series of public discussions for input on establishing standards for tax preparers. It’s about time, I say.

July 14, 2009: The Internal Revenue Service today announced a series of public forums at which individuals and representatives of diverse constituent groups will be able to provide input on the development of tax preparer performance standards. The public forums, a crucial part of an effort launched in June by IRS Commissioner Doug Shulman to help ensure tax preparers are qualified, ethical and provide a high level of service, will kick off on July 30 in Washington, D.C.

“These public meetings will be an important part of the dialogue as we move toward a set of comprehensive recommendations by the end of this year,” Shulman said. “We want an open discussion on how to strengthen the overall integrity of our tax system.”

Knock wood. Tax preparation isn’t an occupation known for deceptive practices. Read the rest of this entry »

I am like my mother in many ways.  Notably when it comes to physical characteristics, my mother taught me that only two things matter when assessing the physical attractiveness of another human being.  Eyes are important because they allow you to read more about a person than words will ever articulate.  And nice, white straight teeth are just plain important.  No supporting rationale is required for teeth.

While I cannot control the eyes of my adoptive children (which are lovely by the way), the shape their teeth take as adults is something I can shape (and their teeth really do need some serious help). I will mold their teeth with the help of some very expensive orthodontics.

According to the Canadian Association of Orthodontics, having a nice smile is only one benefit of braces.  It can also help alleviate health problems and social/psychological issues that crop up when one is not comfortable in one’s own skin.

While I initially wanted my kids to get braces for purely aesthetic reasons, visits with our dentist and the orthodontist revealed that we had bigger problems than initially thought.  Two of our daughter’s adult canines hadn’t descended and she needs some serious bite realignment.  Some of our son’s adult teeth aren’t appearing on x-rays and at 11 years he still has more baby teeth than adult teeth in his mouth. Read the rest of this entry »