Posted by LWM Team on Fri, Apr 23, 2010
It is time to get your Tax Form 1040 organized. Approximately forty percent of US taxpayers will file their tax return this month. There are adjustments to the tax law bringing down the amount you hand over to Uncle Sam and bringing you some tax relief.
Recently there were three adjustments/revisions to first-time and move-up homebuyer credits. The latest is most beneficial. The American Recovery and Reinvestment Act of last year mean tax owed can be brought down dollar-for-dollar. This is a money-back credit and you may be eligible for a refund even with a tax bill of zero. The first-time homebuyer’s credit was amplified to $8,000. Longtime residents with a minimum of five straight years prior to purchasing a new home, get up to $6,500. A property owner must qualify to receive credit.
New homeowners installing Energy Star rated units can get a tax credit of $1,500 when filing a return.
For example, energy saving air conditioners and furnaces are eligible. This credit is available in 2010.
By returning a Schedule L you can claim for sales or excise taxes spent on new vehicles. This is possible even if you claim regular tax deductions. The new Schedule A will continue to be used for deductions by itemizers. Your deduction depends on earnings and cost of a new vehicle. A lot of people stand to benefit.
The American Opportunity Credit substitutes the Hope Education Credit. The AOC provides a student with credit of $2,500. You can include expenses for the first four years of post-secondary studies. It’s possible to get back a maximum of $1,000 without owing taxes because credit is refundable.
Those who lost employment the previous year and relied on unemployment reimbursements get the initial $2,400 free of tax. If both spouses lost their jobs and both received unemployment reimbursement each is entitled to $2,400 free of tax totaling $4,800 per married couple in 2009.
Americans who donated to the Haiti disaster have the opportunity of claiming the write-off on 2009 or 2010 tax return if itemized.
Claims for standard deductions carry more items and they must be accompanies with a Schedule L.
The new items are:
Single filers - $500 and joint filers $1,000 for state or local real estate taxes
Form 4684 for net disaster
State or local sales or excise taxes for new vehicles
The above is in addition to the existing old items:
Heads of household - $8,350
Eligible widowers and widows and married couples filing a return jointly - $11,400
Singles and married individuals filing a separate return - $5,700
Posted by LWM Team on Thu, Feb 18, 2010
"Tax Relief": two words that goes great together and for good reason.
People pay a lot of money each year in taxes and in today's economy, any savings are good savings. The government at state and local levels offers a lot of help that people simply don't realize is available. This is great news if you owe the IRS some money or are looking to save during the filing of next year’s taxes. Most tax preparers will offer you tax relief help but it's a good idea to ask them if you qualify because they may not know your circumstances. Here are a few common types of tax relief:
Penalty Abatement
A lot of people owe the IRS money and penalties and interest will accumulate as long as you don't comply with them. You can get penalty abatement tax relief which will reduce the penalties or even eliminate them completely for past taxes owed.
Installment Agreements
This is exactly what it sounds like. You can work with the IRS to pay them back slowly over a period of months or years instead of giving them a large lump sum.
Disaster Tax Relief
Were you in a recent disaster like Hurricane Katrina? The government will offer complete tax relief to you.
That means you don't have to pay taxes for that particular year or you have a number of years to take care of it.
Tax relief help of this kind doesn't occur very often and is unfortunate but at least the IRS gives you some leeway.
Compromise
Like many credit card companies, the IRS may offer you a compromise. This could be very cheap if you owe a lot of money.
You could pay well under 40% of what you actually owe because the IRS doesn't like to waste time and resources by taking you to court.
Tax relief help is very important to get. Someone well trained in this can find you more areas you may qualify for than you can on your own. Even if they charge a fee for this tax relief help, odds are you will get back much more than you pay.
Posted by LWM Team on Tue, Feb 09, 2010
Many people today are facing their fears and taking the bull by the horns. The IRS can only be ignored for so long, and as the economy gets tougher, people are realizing that it's to their benefit to act now. With so many Americans struggling to survive, people are now beginning to look for new solutions to help with income tax relief. An offer in compromise is one possibility that may provide hope for a select few. Keep in mind that certain criteria must be met and the IRS is and always will be appeased by the largest amount of money they can collect.
It may very well suit the average person to take this possible alternative to income tax relief by consulting with a financial professional. An offer in compromise may provide a chance to settle income tax debt, however, it requires various forms and the IRS has rigid requirements about an offer in compromise. If the IRS believes they can collect a large amount of money from you outside of the offer of compromise, it's a very good chance they will not consider this option. The IRS also must be proven to that the person is financially not able to pay the full amount.
Many factors come to play in a person's possibility to be granted an offer in compromise by the IRS. It certainly can be a way to ward off a chunk of unpaid debt, yet it is also best left to the hands of a trusted professional to help you sort your way through the red tape. A CPA or your local tax person can help walk you through the best possible terms for you to compromise. If the IRS believes they can retrieve more from you through other means of collection, then the offer will most likely not be one they entertain. For income tax relief, this compromise is a possibility that provides definitive relief for many. See your consultant to find out if this option is right for you.
Posted by LWM Team on Tue, Feb 09, 2010
Across the board, nearly every working class family seems to be affected by the current economy. However, when it comes to income tax relief, solutions arise in many different forms. Take today and consider your given options for tax relief. Many people are suffering from debt owed to the IRS. If you are one of those people there are several options available that your local tax professional can assist you with.
Penalty Abatement is just one choice that you can consider. The penalty abatement will give you the opportunity to wipe clear the penalties applied to your account for past due balances. It may seem like a small thing but the penalties add up rapidly and most people struggle to pay those off, just to get to the actual debt owed.
Other forms of income tax relief come through Earned Income Credit (EIC). EIC will typically apply to middle or lower working class with child care expenses. There are also many other possibilities such as Education Credit for the struggling student, Adoption Credit for people who adopt children, and if you stash away retirement money you may be eligible for a Retirement Savings Credit. And in today's green world, even Energy-Saving Credit is available to those who qualify.
Take a moment from your day and schedule to meet with a financial expert who can help steer you through the sea of options available to you for income tax relief. The average person won't make it through the red tape and regulations by themselves, and most likely will not be aware of the many choices available to them. So even if you're not owed a refund, the credits will result in a lesser amount owed to the government and will result in less out of pocket expense. Keep in mind that deductions can also be given, in addition to the credits. Relief is available to those who invest the time to know their options.
Posted by LWM Team on Tue, Feb 09, 2010
Lose your job? Join millions of other Americans who didn't just lose their jobs, but also lost their ability to help their families OR themselves because of the economic crisis of 2009. Panic is the word that hits first, like a club in the back of the head! But more important than the money, is the fear that someone in your family may get sick and you will not be able to help them. Here comes the tax relief: The Health Continuation Subsidy or COBRA has been expanded this year to a program called the Health Coverage Tax Credit (‘HCTC'). The HCTC will cover a greater number of eligible people and include even more people having nervous break downs because they no longer have employer based health coverage.
What's the Deal?
COBRA will pay 65% or more (due to recent increases) of the health care premiums for people who lost their jobs involuntarily. You must pick up the difference and the program is only good for up to nine months. But if you don't qualify for this program due to details (and the devil is in the details), then the Feds offer another potential help.
Health Coverage Tax Credit is added to Seal the Deal
Just this year the HCTC was signed into law giving trade affected workers, retirees and their families 80% payment of their health care premiums. And by "trade affected" we mean your job went ‘bye, bye' overseas...or that the job you do has seriously declined or doesn't exist anymore.
How do you pay even 20% without a job? THAT is the $64 question! But if you can come up with the required premium, at least it buys some COBRA time...and keeps the wolves at bay.