Stamp Out Tax Season Stress!

Are you ready for tax time? There are a couple of steps you can take now to alleviate some of the stress of filing your return. Plan to get organized early. Begin by putting together a tax folder with W-2s from your employer, 1099s for other income you may have earned, bank and other financial statements and receipts for things like medical bills and charitable donations. A helpful video from the American Institute of CPAs offers more information on the best ways to get ready now and throughout the year. Once you’ve gathered all your important paperwork, this is a …
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I Owe the IRS, Should I Still File?

If you are considering not filing your 2012 tax return, because you may possibly owe the IRS, you should reconsider. The IRS imposes a 4 percent penalty, per month, for failing to file your tax return by the due date. The penalty for failing to pay on time is .5 percent. For every $1,000 you may owe that’s a difference of $50 for not filing and paying on time, versus just $5 for not paying on time, per month. If you think it’s best to not file and perhaps the IRS won’t notice, beware that your employers or contractors are …
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Tax Deductions for the Self-Employed

One of the great things about self-employment, and there are many, are all the tax deductions you can take. But, beware, because the IRS is monitoring and you want to be sure your business deductions are both ordinary and necessary for your trade or business. Below are a few common expenses your business may be allowed to deduct. Supplies Auto Expenses: Mileage on your personal car, keep good records Business Insurance Premiums Health Insurance Premiums: If self-employed and unable to participate in spouse’s employer plan Self-employed Retirement Plans Computers, Equipment, & Furniture: Either expense it or depreciate it Internet & …
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Can I Itemize My Deductions?

I get this question all the time from my tax clients; “Can I itemize my tax deductions?” Well, it depends. If your total itemized deductions exceed your standard deduction, then yes you can and should itemize. For 2012 the standard deduction is $5,950 for single or married taxpayers filing separately, $11,900 for married couples and qualifying widows, and $8,700 for taxpayers fling as head of household. The most common itemized deductions are real estate taxes and mortgage interest paid on your home, charitable contributions, the higher of state income or sales taxes, medical and dental expenses and miscellaneous deductions. Note …
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Dispelling the Myths about the Earned Income Tax Credit (EITC)

The EITC is a refundable tax credit designed to help lower income families and individuals rise above the poverty level. It is based on earned income: earnings from work, self employment, or from certain disability payments (not government or military disability). Neither, unemployment, social security, retirement income, alimony, nor child support counts as earned income. But, if you worked, and received income from one of the above mentioned sources, it may go into figuring if your income meet or exceed the limits to qualify for the EITC. (see table below) To qualify, you must have a valid social security number, …
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