The Math of Finance

Shared purchase, shared ownership...

noreply@blogger.com (Unknown) — Sat, 20 Feb 2010 11:24:00 +0000

Home Ownership:
Owning your own home is something that each and every person dreams of no matter who or where they are. The satisfaction that your personal home can give you, irrespective of how big or small, is something that you cannot get from the best of rented or leased homes. In fact, in America, home ownership has the same kind of importance that is given to the right to freedom and liberty.

Rights that come with Home Ownership
■Homeowners have the right to do whatever they wish with their homes even after their death. They can choose to leave it to their heirs or for that matter to anyone they desire.
■A homeowner has complete freedom to rent or lease his home or any part of it to whoever they desire, provided there is no discrimination based on race. They even have the right to regularly inspect their property to see that it is being used and maintained properly.
■You can sell your home or use it for any purpose (as long as it is not illegal) and even restrict the use of any natural resources available on your property.
Responsibilities of Homeowners
■You have to follow the zoning regulations that apply to your property. If your home is in a residential only zoning area, then you cannot use it for commercial use, unless it is something like a freelance home business that will not alter the residential neighborhood.
■You can renovate your home as you wish, but you have to stay within the building codes that govern the plumbing, electrical, and various other systems.
■An easement is giving others the right to use part of your property. For example, if some electric lines have to run through your property, then you have to allow the power company to have an easement on your home.
■You can use your home as you wish provided that your neighbors are not disturbed by you making too much noise at unreasonable hours and you are not interfering with them enjoying their own homes.
Home Ownership Tax Benefits
■If you have a mortgage on your home and are paying mortgage interest, then you are entitled to mortgage tax breaks.
■If you have purchased your home with a home loan, then a certain portion of your interest payments are totally deductible from income tax.
■All taxes paid as property taxes are deductible from your income provided these are actually paid and not held in escrow to be paid at a later date.
■Any expenses incurred as selling costs, or to make your home more saleable, are deductible from your income.
Home Ownership Status
■If yours is the only name that appears on your home deed, then you have complete single ownership of your home.
■If you have bought your home along with your parents or say a spouse to qualify for a home loan, then the parties whose names appear on the home deed have a joint ownership in the property.
■If you live in a condominium complex or an apartment building or any other kind of community environment, then although you have single ownership of your own home, you also have a shared ownership in the community complex, and as a shared owner are equally responsible for any repairs, maintenance, and general running of the common shared amenities, which might include a swimming pool, a gymnasium, grounds, common entertainment facilities, etc.
Home ownership is typically given a lot of importance and homeowners are generally allowed to do whatever they wish in their homes. While their rights are exclusive, they are not absolute. All homeowners should take care of their legal responsibilities towards their homes as well as their neighbors, so that they can enjoy their homes and at the same time not worry about having to be involved in any legal battle with regards to their home ownership.

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2009 Stimulus Plan Benefits in a Nutshell

noreply@blogger.com (Unknown) — Fri, 13 Feb 2009 14:55:00 +0000

Deal Announced on Stimulus; Weekend Vote Likely

$40 billion to provide extended unemployment benefits through Dec. 31, and increase them by $25 a week; $20 billion to increase food stamp benefits by 14 percent; $3 billion in temporary welfare payments.

$14 billion to give one-time $250 payments to Social Security recipients, poor people on Supplemental Security Income, and veterans receiving disability and pensions.

$46 billion for transportation projects, including $27 billion for highway and bridge construction and repair; $8.4 billion for mass transit; $8 billion for construction of high-speed railways and $1.3 billion for Amtrak; $4.6 billion for the Army Corps of Engineers; $4 billion for public housing improvements; $6.4 billion for clean and drinking water projects; $7 billion to bring broadband Internet service to underserved areas.

$21 billion to provide a 60 percent subsidy of health care insurance premiums for the unemployed under the COBRA program; $87 billion to help states with Medicaid; $19 billion to modernize health information technology systems; $10 billion for health research and construction of National Institutes of Health facilities.

$8 billion in aid to states to defray budget cuts.

About $50 billion for energy programs, focused chiefly on efficiency and renewable energy, including $5 billion to weatherize modest-income homes; $6.4 billion to clean up nuclear-weapon production sites; $11 billion toward a so-called smart electricity grid to reduce waste; $13.9 billion to subsidize loans for renewable energy projects; $6.3 billion in state energy efficiency and clean energy grants; and $4.5 billion to make federal buildings more energy efficient.

$47 billion in state fiscal relief to prevent cuts in state aid to school districts, with great flexibility to use the funds for school modernization and repair; $26 billion to school districts to fund special education and the No Child Left Behind law for students in K-12; $17 billion to boost the maximum Pell Grant by $500 to $5,350; $2 billion for Head Start.

$2.8 billion for homeland security programs, including $1 billion for airport screening equipment.

$4 billion in grants to state and local law enforcement to hire officers and purchase equipment.

Approximately $115 billion for a $400-a-worker, $800-a-couple tax credit in 2009 and 2010. For the last half of 2009, workers could expect to see perhaps $13 a week less withheld from their paychecks starting about June. Millions of Americans who don"t make enough money to pay federal income taxes could file returns next year and receive checks. Individuals making more than $75,000 and couples making more than $150,000 would receive reduced amounts.

About $70 billion to spare about 24 million taxpayers from being hit with the alternative minimum tax in 2009. The change would save a family of four an average of $2,300. The tax was designed to make sure wealthy taxpayers can"t use credits and deductions to avoid paying any taxes. But it was never indexed to inflation, so families making as little as $45,000 could get significant increases without the change. Congress addresses it each year, usually in the fall.

About $13 billion to provide a $2,500 expanded tax credit for college tuition and related expenses for 2009 and 2010. The credit is phased out for couples making more than $160,000.

$3.7 billion to repeal a requirement that a $8,000 first-time home buyer tax credit be paid back over time for homes purchased from Jan. 1 to August 31, unless the home is sold within three years.

$5 billion to extend a provision allowing businesses buying equipment such as computers to speed up its depreciation through 2009.

$2.5 billion to makes sales tax on paid on new car purchases tax deductible.

Source: Associated Press

Bay Area Trusted

The Tax Man
Wil Chase Oliver
http://www.baytaxman.com

Don't miss out on your stimulus payment

noreply@blogger.com (Unknown) — Sat, 01 Mar 2008 06:42:00 +0000

Don't miss out on your stimulus payment

Don't miss out on your stimulus payment

IRS TAX TIP 2008-Special Edition

Are you wondering what to do to ensure that you receive your economic stimulus payment which the IRS will begin to send out this May? In most cases you will not have to do anything extra. If you are eligible for a payment, all you have to do is file a 2007 tax return and the IRS will do the rest.

However, recipients of Social Security, certain Veterans' and Railroad Retirement benefits and low-income workers who don’t normally need to file may have to take steps to insure receipt of the stimulus payment.

If you are in this group and normally would not be required to file a tax return, you need to file a 2007 tax return this year to receive an economic stimulus payment. The return must show at least $3000 in qualifying income.

Qualifying income includes Social Security benefits, certain Railroad Retirement benefits, certain veterans’ benefits and earned income, such as income from wages, salaries, tips and self-employment. While these people may not be normally required to file a tax return because they do not meet the filing requirement, the IRS emphasizes they must file a 2007 return in order to receive a payment.

The IRS has released a sample version of a Form 1040A that highlights the simple, specific sections of the return that can be filled out by people in these categories to qualify for a stimulus payment.

For more information see IRS Fact Sheet FS 2008-16 Stimulus Payments: Instructions for Low-Income Workers and Recipients of Social Security and Certain Veterans’ Benefits available on www.irs.gov.

Be aware that identity thieves are already pushing scams involving the stimulus payments. At least one telephone scam is making the rounds using the proposed rebates as bait. IRS news release IR-2008-11,”IRS Warns of New E-Mail and Telephone Scams Using the IRS Name; Advance Payment Scams Starting,” has more details.

Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www .irs.gov.

Links:

Economic Stimulus Payments Information Center

Tax Credit Reporting Service for Students

noreply@blogger.com (Unknown) — Sun, 03 Feb 2008 05:37:00 +0000

ACS :: 1098T

TCRS For Students

Tax Credit Reporting Service for Students

Welcome to the Tax Credit Reporting Service (TCRS) Student/Taxpayer web site. This site provides useful information on the Taxpayer Relief Act of 1997, which provides education tax incentives for eligible taxpayers. These benefits, called the Hope Scholarship Credit and Lifetime Learning Credit, allow taxpayers to reduce their federal income tax based upon qualified tuition and fees paid, assuming the taxpayer meets all TRA’97 requirements.

This site also contains information on the Tuition and Fees Deduction for Higher Education Expenses. This tax deduction permits taxpayers to take an "above the line" deduction for qualified higher education expenses paid by the taxpayer during a taxable year. Additional information can be found by selecting the The Deduction for Higher Education Expenses link under TRA’97 Information menu option.

For more information regarding student loan interest paid and 1098-E year-end tax statement click the following link www.acs-education.com.

If TCRS provides tax credit reporting services for your school,
proceed to Access My Record and follow the instructions to obtain secure access
to your student-specific data.

Best And Worst Cities For Renters

noreply@blogger.com (Unknown) — Sun, 03 Feb 2008 02:34:00 +0000

In Pictures: Least Expensive Cities For Renters - Forbes.com

Real Estate
Best And Worst Cities For Renters
Matt Woolsey, 01.07.08,
6:00 PM ET

Writing a monthly rent check often feels like lighting money on
fire. You'll never again see that cash, you build no equity and there
are no tax benefits.

But renting makes sense to those unwilling
or unable to buy a home in an uncertain housing market. The number of
such Americans seems to be growing; last month mortgage applications
fell to their lowest level in a year.

That's good news for landlords--especially those in New York City and San Francisco. In these cities, tenants pay the highest rents in the country by a significant margin.

Read the full article at:
http://www.forbes.com/2008/01/07/rentals-US-expensive-forbeslife-cx_mw_0107realestate.html

Even babysitters get the blues...

noreply@blogger.com (Unknown) — Wed, 30 Jan 2008 05:13:00 +0000

Here is a form to have completed by your child care provider and bring with you to The Tax Man. Having accurate and verified information at the tax desk will help a lot.

Moreover, the Child and Dependent Care Credit allows lower income taxpayers with children and/or disabled adult dependents up to $6,000 ($3,000 per dependent), 20% of which will be fully refunded to you in your pocket on your IRS federal return, then about 40% of that refundable credit is additionally refunded to you in your pocket on your California State tax return.

Yes, well worth getting in touch with your provider and confirming the dates and numbers!

IRS.gov Search Results

Form W-10 (Rev. August 1996) PDF
Dependent Care Provider's Identification and Certification
Form W-10 (Rev. August 1996) Form W-10 (Rev. August 1996) Dependent Care Provider’s Identification and Certification Department of the Treasury Internal Revenue Service Dependent Care Provider’s Identification (See ...
http://www.irs.gov/pub/irs-pdf/fw10.pdf - 35.0KB

Is the Assistance we get for our adopted children taxable?

noreply@blogger.com (Unknown) — Wed, 30 Jan 2008 01:16:00 +0000

NACAC | Adoption Subsidy

Tax Issues Related to Adoption Assistance and Adoption

Adoptive parents often ask whether adoption assistance (adoption subsidy) payments are taxable. Many also wonder about claiming their child as a dependent and using the child tax credit. NACAC reviewed related IRS publications, and below we offer our interpretation of these issues. Please know that NACAC is not a tax expert, and these opinions should not be considered legal or financial advice. You should consult your own tax advisor before filing.

Adoption Assistance Payments as Taxable Income

Since 1974, the IRS has ruled that adoptive parents do not normally need to include adoption assistance benefits in their taxable income (see box below for specific IRS language).

IRS Publication 17: Your Federal Income Tax

Publication 17 has made two references related to the taxability of adoption assistance:

* Chapter 12: Other Income—Welfare and Other Public Assistance states “do not include in income the benefit payments from a public welfare fund” (p. 84). In 1974, the IRS ruled that adoption assistance benefits were public welfare payments and thus exempt from taxation under this clause.
* In a previous version of Publication 17, the IRS specifically stated “do not include in your income payments from a state agency to help you care for your adopted child” (p. 67 of the 1986 Publication 17).

However, the IRS also says that adoption assistance benefits may be taxable if they exceed the amount an adoptive family spends to support the child. This situation might occur if adoption assistance was a family’s sole source of income. In cases such as this, some of the adoption assistance funds are used to meet the needs of the parent(s), so not all funds are being spent to support

Why It Might Pay to Go Solo

noreply@blogger.com (Unknown) — Fri, 04 Jan 2008 05:48:00 +0000

Wells Fargo

Why It Might Pay to Go Solo

If you’re looking for a good retirement plan, especially one that can help you maximize tax-deductible retirement contributions, it might pay to look at a solo 401(k). Typically, if you’re self-employed or own a small business and have no other full-time employees (with the exception of the owner’s spouse), the first plans to consider have been simplified employee pensions (SEPs) and savings incentive match plans for employees (SIMPLE) IRA plans. They’re both solid plans because they’re fairly simple and don’t cost much to administer.

But depending on your goals, a 401(k) plan may offer a better combination of benefits. A solo 401(k) plan is a standard 401(k) plan combined with a profit-sharing plan. (It’s not a different kind of 401(k) plan, but one that takes advantage of the relaxed rules that apply when the only people who participate in the plan are the owner and his or her spouse.) If you have full-time employees age 21 or older (other than your spouse) or part-time employees who work more than 1,000 hours a year, you’re not eligible for a solo 401(k).

A solo 401(k) also offers the same flexibility as a standard 401(k), as you can choose to invest pre-tax money or go for a Roth plan, which allows you to invest after-tax dollars.

In terms of maximizing contributions to your solo 401(k), you can invest as much as $15,500 as an employee for 2007. As an owner, you’re allowed to contribute an additional 25% of your compensation, up to a total of $45,000. And there is no minimum contribution, so you don’t have to worry about not adding to the fund during lean years. So if you and your spouse are both in the solo 401(k), you could save up to $90,000 per year. If you’re age 50 or older, you can add another $5,000 each in catch-up contributions this year.

With a standard 401(k), you can only invest up to the $15,500 limit and the catch-up contribution. In the case of a SEP IRA, you can invest only 25% of your business income up to $45,000. That may seem to compare favorably to a solo 401(k), unless 25% of your business income doesn’t get you to the $45,000 maximum, at which point, you truly miss the benefit of the $15,500 employee contribution. In addition, there is no $5,000 catch-up contribution opportunity.

Solo 401(k)s mean more paperwork than SEP IRAs and once your account reaches $100,000 or more, you need to file a special tax return, but those disadvantages are small compared with the potential benefits.

Talk to your accountant or financial advisor before entering into any retirement plan. To find out more about solo and other 401(k)s, check out 401khelpcenter.com and, for information about plans in general, read IRS Publication 560 (2006), Retirement Plans for Small Business.
©2007 Wells Fargo Bank, N.A. All rights reserved. Member FDIC

Can I claim my parent as a dependent and myself as head of household?

noreply@blogger.com (Unknown) — Thu, 08 Nov 2007 04:16:00 +0000

You may claim a parent as a dependent, and yourself as head of household if the for tests above are passed.

Read more at: http://www.irs.gov/pub/irs-pdf/p501.pdf

Do I have to pay tax on US Savings Bonds?

noreply@blogger.com (Unknown) — Thu, 08 Nov 2007 02:43:00 +0000

US Savings Bond Interest, IRS and Tax

Do I have to pay tax on US Savings Bonds?

US Savings Bonds - Series E and EE Bonds, and Freedom Shares

First offered in May, 1941 Series E - US Savings Bonds, and its successor, Series EE - US Savings Bonds, offer tax deferred accumulation of interest until you redeem the US Savings Bonds. Series EE US Savings Bonds have been offered since January 1980. Series EE US Savings Bonds can be purchased for ½ their face value. The difference between the US Savings Bonds purchase price and the redemption value is your taxable interest. You don't have to report the taxable interest on your tax return until you redeem the US Savings Bonds or they finally mature. However, you can make an election to report the taxable interest on your tax return annually. Because US Savings Bonds are issued by the federal government you do not have to pay state tax or local tax on the interest. You'll receive a Form 1099-INT in the tax year that the US Savings Bonds are redeemed. Freedom Shares, which were issued between 1967 and 1970 work the same way as Series E and EE US Savings Bonds.

All of the accumulated interest on E and EE US Savings Bonds is taxable in the tax year that they mature and must be reported on your tax return. One way to avoid the tax is to trade the E or EE US Savings Bonds for HH bonds. This will continue to defer the tax and you won't need to report the tax on your tax return. Special tax rules apply for US Savings Bond Tuition Plans.

Brother2Brother & sister2Sister ~ Life Strategies Consulting

noreply@blogger.com (Unknown) — Mon, 22 Oct 2007 10:40:00 +0000

Brother2Brother & sister2Sister ~ Life Strategies Consulting

2008 Price List

* The cost of your tax preparation is based on the complexity of your returns. Additional forms for processing Retirement Income, Itemized Deductions, Education Deductions and credits, Rental Real Estate, 2-weeks, 2-days & today Fast Funds loans, plus other ancillary services will incur additional fees.

Pay Yourself First...Save!

Call now for a FREE phone consultation

1-510-268-1126

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CLIENT	FORMS	BASE FEE (Federal and State)
California Tax Return	540 and attachments	FREE with Federal Return Preparation
Individual	W-2 1099g, IRA, 401K, 1098s 1040EZ & 540EZ	$49.99 base
Head of Household (includes dependent)	W-2 1099g, IRA, 401K, 1098s 1040(1040A) & 540	$69.99 base
Married Couple	W-2 1099g, IRA, 401K, 1098s 1040(1040A) & 540	$69.99 base
Amended Return	1040x and 540x	$99.99 base
Deductions and Credits		In addition to base fee
Earned Income Tax Credit (EITC)	Form 8867 For low-income wage earners with and without children	+$29.99
Child Tax Credit and Additional Child Tax Credit	Form 8812 Up to $1,000 per child for low-income Taxpayers with children	+$29.99
Child/Dependent Care Credit	Form 2441 Federal tax credit for low-income Taxpayers with children. A portion carries over into a state tax credit.	+$29.99
Itemized Deductions	Schedule A	+$29.99
Specialty Tax Preparation		In addition to base fee
Small Business/Contractor (Profit or Loss from Business)	1099- Misc Schedule C	+$49.99
Business Use of Home	Form 8829	+$39.99
Sales & Field employees (Employee Business Expenses)	Form 2106	+$39.99
Quarterly Estimated Tax Return	Form 1040ES	+$39.99
Self Employment Tax & 50% S.E. Tax Adjustment	Schedule SE	+$29.99
Corporate	Form 990 Form 1065 Form 1120	Call for Quote
Income or Loss from Rental Property	Schedule E	+$49.99
Alternative Minimum Tax	Form 6251	+$49.99
Other Services
Financial Planning	For all the stages of your life	$45 hourly
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IRS debt negotiation	Offers in compromise, extensions, letters, calls, etc.	$45 hourly
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Have just enough taken out of your pay during the year. Keep a proper W-4 on file with your employer.	W-4	FREE
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Educator (Teacher) Deduction	Allows adjustment ofup to $250 in unreimbursed classroom expenses	FREE
California Disabled Renter's Rebate	Up to $350 is available from the California state Franchise Tax Board (FTB) for disabled persons who live in unsubsidized rental housing. Not based on any income or tax filings.	FREE
Education Deductions and Credits	1098-E & T, Form 8863 Hope Credit,Lifetime Learning Credit, Student Loan Interest Deduction, FAFSA information form, and more...	FREE
Direct Deposit of Refund	Form 8888	FREE
Automatic Extention of Time to File	Form 4868	FREE
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Strapped Homeowners Gain Tax Relief

noreply@blogger.com (Unknown) — Mon, 22 Oct 2007 06:00:00 +0000

Special Web Section Unveiled for Homeowners Who Lose Homes; Foreclosure Tax Relief Available to Many

Special Web Section Unveiled for Homeowners Who Lose Homes; Foreclosure Tax Relief Available to Many

IR-2007-159, Sept. 17, 2007

WASHINGTON — The Internal Revenue Service unveiled a special new section today on IRS.gov for people who have lost their homes due to foreclosure. The IRS also reassured homeowners that, although mortgage workouts and foreclosures can have tax consequences, special relief provisions can often reduce or eliminate the tax bite for financially strapped borrowers who lose their homes.

The new section of IRS.gov includes a variety of information, including a worksheet designed to help borrowers determine whether any of the foreclosure-related relief provisions apply to them. For those taxpayers who find they owe additional tax, it also includes a form they can use to request a payment agreement with the IRS. . In some cases, eligible taxpayers may qualify to settle their tax debt for less than the full amount due using an offer-in-compromise.

The IRS urges struggling homeowners to consider their options carefully before giving up their homes through foreclosure.

Under the tax law, if the debt wiped out through foreclosure exceeds the value of the property, the difference is normally taxable income. But a special rule allows insolvent borrowers to offset that income to the extent their liabilities exceed their assets.

The IRS cautions that under the law, relief may be limited or unavailable in some situations where, for example, part or all of a home was ever used for business or rented out.

Borrowers whose debt is reduced or eliminated receive a year-end statement (Form 1099-C) from their lender. By law, this form must show the amount of debt forgiven and the fair market value of property given up through foreclosure. Though the winning bid at a foreclosure auction is normally a property’s fair market value, it may not necessarily reflect its true value in some cases.

The IRS urges borrowers to check the Form 1099-C carefully. They should notify the lender immediately if any of the information shown on their form is incorrect. Borrowers should pay particular attention to the amount of debt forgiven (Box 2) and the value listed for their home (Box 7).

The IRS also reminds lenders of their obligation to provide accurate information on the Form 1099-C. By law, the lender must send a copy of this form to the IRS. IRS follow-up contacts with taxpayers involved in foreclosure are based largely on the information reported on this form, and whether it conflicts with information provided by the taxpayer on their federal income tax return.

The IRS normally initiates these follow-up contacts by sending the borrower a notice. The tax agency urges borrowers with questions to call the phone number shown on the notice. The IRS also urges borrowers who wind up owing additional tax and are unable to pay it in full to use the installment agreement form, normally included with the notice, to request a payment agreement with the agency.

Related Item:Questions and Answers on Home Foreclosure and Debt Cancellation

IRS Statute of Limitations

noreply@blogger.com (Unknown) — Sat, 13 Oct 2007 11:59:00 +0000

IRS Statute of Limitations: Time Limits to Claim Tax Refunds or to Pay Tax Debts

Plan Your Tax Strategy Around These Time Limits
The IRS has three years to give you a refund, three years to audit your tax return, and ten years to collect any tax due. Together, these laws are called the statute of limitations. They put time limits on various tax-related actions that you and the IRS can take.

You have 3 years to claim a tax refund.
This is measured from the original deadline of the tax return, plus three years. For example, your 2004 tax return was due on April 15th, 2005. 2005 plus 3 is 2008. You have until April 15th, 2008, to file your 2004 tax return and still get a tax refund. File your 2004 return after April 15th, 2008, and your refund "expires." It goes away forever. This is called the statute of limitations for claiming a refund.

The tax code says that you have three years from the original filing deadline to claim a refund. Please file your 2004 tax returns on or before April 15th, 2008, so that your refunds are not lost forever.

The IRS has 3 years to audit your tax return or to assess any additional tax liabilities.
This is measured from the day you actually filed your tax return. If you filed your taxes before the deadline, the time is measured from the April 15th deadline. For example, you filed your 2006 tax return on February 15th, 2007. The 3-year time period for an audit begins ticking from April 16th, 2007, (the filing deadline) and will stop ticking on April 16th, 2010. On April 17th, 2010, the IRS cannot audit your 2006 tax return unless there is a suspicion of tax fraud.

The IRS has 10 years to collect outstanding tax liabilities.
This is measured from the day a tax liability has been finalized. A tax liability can be finalized in a number of ways. It could be a balance due on a tax return, an assessment from an audit, or a proposed assessment that has become final. From that day, the IRS has ten years to collect the full amount, plus any penalties and interest. If the IRS doesn't collect the full amount in the 10-year period, then the remaining balance on the account disappears forever. The statute of limitations on collecting the tax has expired.

Example of the Statute of Limitations
Let's provide an example based on a real-life scenario. Mr. Smith wants to file 6 years of tax returns: 2001 through 2006. All years he has refunds. If he files by April 15th, 2007, Mr. Smith will receive refunds for his 2003, 2004, 2005, and 2006 tax returns. His refunds for 2001 and 2002, however, have expired.

Let's change the example slightly. Mr. Smith wants to file 6 years of tax returns: 2001 through 2006. In 2001 and 2002, he could have received a refund. In 2003, 2004, and 2005, he owes. Mr. Smith cannot apply his 2001 or 2002 refunds as an estimated tax payment towards his 2003 taxes. His refunds have expired. For the 2003 to 2006 tax returns, the IRS has ten years to collect the full tax, plus penalties and interest, from the date Mr. Smith actually files the returns. If Mr. Smith has a refund for 2006, that refund will be used to pay off his tax debts.

Non-Deductible Income, yay!

noreply@blogger.com (Unknown) — Tue, 09 Oct 2007 02:25:00 +0000

Tax tips, information and tax return preparation advice

Non-Taxable Income

Don't overpay the IRS by including non-taxable income on your tax return. The following are some of the main non-taxable items of income:

* Life insurance proceeds
* IRA and pension rollovers
* Child support payments
* Inheritances
* Gifts
* Workers comp
* Disability payments if you paid the premiums on the policy. If your employer paid the policy, then the disability payments are taxable. If you paid part of the policy, then part of the disability payments are non-taxable.
* Damages for personal physical injuries. However, damages for emotional distress are taxable except for related medical expenses.
* Health and accident benefits.
* Federal income tax refund. Also your state income tax refund if you took the standard deduction on the related prior year's 1040.
* Many scholarships and fellowships are not taxable.
* Foster care payments (certain restrictions for individuals over age 18 in foster care)
* Gain on the sale of your personal residence is usually nontaxable. The gain might be taxable if you lived in the residence less than two years or if the residence has ever been used as a rental property or home office.
* Roth IRA qualified distributions.

Pay over 50% of parent expenses? Claim them as dependent and yourself as head of household!

noreply@blogger.com (Unknown) — Tue, 09 Oct 2007 02:24:00 +0000

Tax tips, information and tax return preparation advice

Seven Common Tax Mistakes

1. Had a Baby
If you had a baby last year, you need to get a Social Security number for your child before you file your tax return. The IRS will not allow you to claim a dependency exemption, child tax credit or Earned Income Credit without a valid Social Security number.

2. Head of Household
Don't file as "Single" if you qualify to file as "Head of Household." You will get a bigger refund if you file as Head of Household. If your ex-spouse claims your child as a dependent on his or her tax return, but the child lives with you, then you probably can still file as Head of Household. Also, if you can claim a parent, grandparent, nephew, niece, brother or sister as a dependent on your tax return, you can probably file as Head of Household.

3. File for an Extension
File an extension if you can't complete your tax return by April 15th. If you don't file an extension, you are charged an additional penalty of 5% a month. Many people who owe tax on April 15th make the big mistake of not filing an extension because they don't have any money to send in with their extension. By sending in an extension even without any payment, you avoid the large 5% a month late-filing penalty and only have to pay the much smaller late-payment penalty.

4. Custodial Parent
A custodial parent who has released the right to claim their child as a dependent to their ex-spouse still has the right to claim head-of-household status, the earned income credit, and dependent care credit. However, if released, the non-custodial parent claims the $1,000 child tax credit along with the dependency exemption.

5. Match Your 1099s
Make sure that your tax return numbers match the 1099s you receive from your broker, employer, or investment company. The IRS receives a copy of all 1099s issued to you so they can match what's on your tax return with what is shown on the 1099s.

6. IRAs
If you have a traditional IRA or SIMPLE IRA, you are required to receive a minimum distribution when you reach age 70 1/2. If your distribution is less than the minimum required distribution, a 50% excise tax may be imposed on the shortfall. Minimum distributions do not apply to Roth IRAs.

7. Early 401(k) or IRA Distribution
If you are younger than age 59 1/2, think twice before you take an early distribution from your 401(k) or IRA account. A 10% early distribution penalty is charged along with federal and state tax on the distribution. A large distribution will bump a taxpayer up to a higher tax bracket, so you also end up paying a higher rate of taxes on your regular income.

A Syndicated column of your own!

noreply@blogger.com (Unknown) — Sat, 01 Sep 2007 03:37:00 +0000

Helium: What is Helium? - Where Knowledge Rules

Write
Whether you care about pop culture or politics, Helium is the place to write on the web. No one will edit your opinion. Helium is a free market, where articles on the same topic compete for the top spot. Join the quest to build the best user-created reference there is.
Rate
If you write at Helium, you are also an editor. It’s simple and fun: You read article A and article B in a side-by-side comparison. You pick which is better. After many ratings by many people, quality rises to the top.
Learn
Real advice from real people-more than 300,000 articles. Why should you waste your time wading through search results when what you really want is the knowledge that comes with first-hand experience?
Earn
Writers receive instant recognition from an audience of millions. When you share, Helium shares back. Earn a share of the advertising money earned here at Helium. If you write well, and write often, you earn even more recognition and reward.

Join the worldwide broadband TV revolution

noreply@blogger.com (Unknown) — Sat, 01 Sep 2007 02:54:00 +0000

TVU networks | Welcome

Join the global TVU network

Launch your live Broadband TV Channel today!

Did you Know... Charities operating under $5,000 may have tax exempt status without filing for formal IRS recognition?

noreply@blogger.com (Unknown) — Mon, 27 Aug 2007 19:29:00 +0000

Public Charity - Exemption Application

Public Charity - Exemption Application

To be exempt under section 501(c)(3), an organization must file an application for recognition of exemption with the IRS. The law provides limited exceptions to the filing requirement.

The form required to apply for exemption under section 501(c)(3) is Form 1023. Form 1023 has instructions and checklists to help you provide the information required to process your application. The IRS will not process an incomplete application.

See When to File for an explanation of the deadlines for filing Form 1023.

Exceptions to Application Requirement

The following organizations are excepted from the exemption application requirement:

*
Churches, their integrated auxiliaries, and conventions or associations of churches; and
*
An organization that is not a private foundation and the gross receipts of which in each taxable year are normally not more than $5,000.

Help a charity with a discount and help yourself with a dediction

noreply@blogger.com (Unknown) — Mon, 27 Aug 2007 19:12:00 +0000

Your business may be able to deduct discounts to non-profits.

Charitable Contributions

Doing good can also be good for your bottom line. If you donate land so the local homeless shelter can build a new facility to house more people, you can write off the full market value...

But Congress recently tightened the rules for substantiating donations
of money. As of Jan. 1, 2007, cash contributions, no matter how small,
can't be written off unless you have a canceled check, bank record, or
a receipt with the charity's name and donation amount...

For property worth more than $5,000 ($10,000 for stock in closely held firms), you'll need to get a formal appraisal...

You can take the deduction for your contribution in the year that you make it...

The IRS has an online search tool that allows you to enter the name and
location of an organization and find out instantly whether it passes
muster. Go to http://apps.irs.gov/app/pub78.

Get started the right way!

noreply@blogger.com (Unknown) — Mon, 27 Aug 2007 18:58:00 +0000

Starting a Nonprofit Organization

Written by Carter McNamara, MBA, PhD, Authenticity Consulting, LLC. Copyright 1997-2007.

Adapted from the Field
Guide to Developing and Operating Your Nonprofit Board of Directors.

Applies to nonprofits unless otherwise noted.

This topic in the Library provides comprehensive advice and
materials for anyone who is considering starting a nonprofit organization.
The reader can use the free information in this Library topic,
along with other Library topics that are referenced later

Consumer Financial Services from Operation Hope

noreply@blogger.com (Unknown) — Tue, 21 Aug 2007 23:25:00 +0000

OperationHope.org

HOPE Center, Oakland

3062 East 9th Street

Oakland, California 94601

Telephone: 510 535 6700

Facsimile: 510 535 6704

email: oakland@operationhope.org

Monday through Friday 9am - 7pm

Saturday 10am - 2pm
Sunday - Closed

We The People...a recommendation

noreply@blogger.com (Unknown) — Wed, 15 Aug 2007 19:19:00 +0000

Get in touch with Ian for professional preparation of your articles of incorporation for your nonprofit, then come and see me--the tax man-- for your IRS recognition of nonprofit status filing.

The Tax Man @ b2bs2s.org ~ 1.510.268.1126

We The People Franchisee :: Oakland, CA

Address: 244 Grand Ave.
Oakland, CA 94610
Phone: (510) 452-2320
Fax: (510) 452-2324
Email: oaklandCA@wethepeopleusa.com
Hours: Day From To By Appt.
SUNDAY By appointment only
MONDAY 10:00 6:00
TUESDAY 10:00 6:00
WEDNESDAY 10:00 6:00
THURSDAY 10:00 6:00
FRIDAY 10:00 6:00
SATURDAY 10:00 2:00
SPECIAL Early mornings or evenings by appointment

PROBATE. What it is and when you need it in California.

noreply@blogger.com (Unknown) — Mon, 13 Aug 2007 03:04:00 +0000

Probate Court How to Probate a Decedent's Estate

1.

1. What is probate?

Probate is when the court supervises the processes that transfer legal title of property from the estate of the person who has died (the "decedent") to his or her beneficiaries.

Usually, you have to fill out court forms and appear in court to:

* Prove to the Court that the Will is valid (this is usually routine),
* Appoint a legal representative with authority to act on behalf of the decedent,
* Identify and inventory the decedent's property, and have that property appraised,
* Pay debts and taxes, and
* Distribute the remaining property according to the terms of the Will or to the decedent's heirs.

2. Is probate necessary?

If the person who died did not have any property to transfer, probate is usually not necessary. The deceased person’s survivors may decide to open a probate if there are debts owed or if there is a need to set a deadline for creditors to file claims.

When there is property to transfer the probate process also provides for the distribution of the estate's property to the decedent's heirs.

3. Does all property go through probate when a person dies?

No. The term "probate estate" refers to any property subject to the authority of the probate court. Assets distributed outside the probate process are part of a person's “non-probate estate.”

California has "simplified procedures" for transferring property for estates worth under a certain amount (from $20,000 to $100,000 depending on the circumstances and the kind of property).

There is also an easy way to transfer property to a surviving spouse, property held in Joint Tenancy and life insurance and retirement benefits.

To learn more about these simplified procedures, see the Simplified Probate Procedures section of this website.

4. Should I choose the simplified procedures?

Not necessarily. Talk to a probate lawyer. There may be debts or tax claims that make probate a better option for you. If there are a lot of issues to handle, going through probate allows you to pay the person who deals with the creditors and taxing authorities.

5. Do life insurance or retirement benefits need to go through probate?

No. The benefits can be paid directly to a named beneficiary. Money from IRAs, Keoghs, and 401(k) accounts transfer automatically to the persons named as beneficiaries. Bank accounts that are set up as pay-on-death accounts (PODs) or "in trust for" accounts (a "Totten Trust") with a named beneficiary also pass to the beneficiary without probate.

6. Do living trusts go through probate?

No. When a living trust holds title to some of the decedent's property, that property also passes to the beneficiaries without probate. (For more information, see the Financial and Medical Decision Making - Living Trusts section of this website.)

Keep a record of all your gambling losses for deductions against that "Big Win!"

noreply@blogger.com (Unknown) — Tue, 17 Jul 2007 18:06:00 +0000

Can I deduct gambling losses on my tax return?

Gambling
winnings are taxable on your tax return. You can deduct gambling losses
on your tax return only if you itemize tax deductions and only to the
extent of your gambling winnings. Claim your gambling losses as a
miscellaneous tax deduction on Schedule A of Form 1040. It is important
to keep an accurate diary or similar record of your gambling winnings
and gambling losses. To deduct your gambling losses on your tax return,
you must be able to provide receipts, tickets, statements or other
records that show the amount of both your gambling winnings and
gambling losses. You cannot deduct or carry forward a net gambling loss
on your tax return; even if you are a professional gambler.

The IRS provides the following guidelines
for proving gambling winnings and gambling losses that you report on your on
your tax return:

an accurate diary or similar record regularly maintained by the taxpayer, supplemented
by verifiable documentation usually is acceptable evidence for substantiation of
gambling winnings and gambling losses. In general, the diary should contain at least the following
information:

	date and type of specific wager or gambling activity;
	name of gambling establishment;
	address or location of gambling establishment; and
	name(s) of other person(s) present with you at gambling establishment.
	amount(s) of gambling winnings or gambling losses.

Verifiable documentation includes, but is not limited to,
gambling tickets, canceled
checks, credit records, bank withdrawals, and statements of actual
gambling winnings or payment
slips provided by the gambling establishment. When possible, the diary and available
documentation of the placement and settlement of a wager should be supported by such
documentation as hotel bills, airline tickets, gasoline credit cards, or affidavits or
testimony from responsible gambling officials regarding the wagering activity.

Who has the real control?

noreply@blogger.com (Unknown) — Mon, 02 Apr 2007 21:06:00 +0000