Tax help > Your mid-year checkup: Get savvy about lowering your taxes

Your mid-year checkup: Get savvy about lowering your taxes

Are you still owing the IRS in taxes every year?Not a great situation to be in, is it? But there is still hope for this year. You have almost six months, in some cases a little longer, to make certain you owe less tax, and possibly no tax, next year.Here's a blueprint that outlines the keys to lowering your taxes and remaining audit proof. Follow these keys and you're guaranteed to lower your taxes by hundreds, if not thousands, of dollars!Key #1: Consider a Home Office Deduction Many taxpayers have avoided the home office deduction because it has been regarded as a red flag for an audit. If you legitimately qualify for the deduction, however, there should be no problem.You are entitled to write off expenses - such as rent, utilities, insurance, and housekeeping - associated with the portion of your home where you exclusively conduct business. A middle-class taxpayer who uses a home office and pays $1,200 a month for a two-bedroom apartment could easily save $1,200 in taxes a year.

People in higher tax brackets with greater expenses can save even moreKey #2: Organize your Records Good organization may not cut your taxes. But there are other rewards, and some of them are financial. For many, the biggest hassle at tax time is getting all of the documentation together. How do you get started??Collect receipts and information that you have piled up thus far. ?Group similar documents together; putting them in different file folders if there are enough papers.

?If you have time, enter the amounts from all these documents into a computer program like Quicken or Microsoft Excel for quick totals and make a printout for your tax preparer. You can expect savings of $300 to $400 with your tax preparer and hours of your time. Plus, you're likely to sail through an audit - with fewer assessments and penalties - if you have documentation on hand.Key #3: Contribute to Retirement Accounts If you haven't already funded your retirement account, do so by April 15, 2005. Making a deductible contribution will help you lower your tax bill. Plus, your contributions will compound tax-deferred.

Your savings will vary. If you are in the 25% tax bracket and make a deductible IRA contribution of $3,000, you will save $750 in taxes the first year. Over time you will save thousands, depending on your contribution, income tax bracket, and number of years you keep the money investedKey #4: Find a Tax Advisor Did this year's tax season feel like a never-ending nightmare of tax forms and a huge tax bill? Then now is the time to take another look at 2003 and plan for the current tax year. First look back at the process you went through in compiling your returns. Do you have a huge tax bill or tax refund? Was your tax preparation software helpful? Did your professional tax preparer meet your needs?.

Any good preparer should save you at least as much as the fee they charge. You may also gain valuable advice on how reduce your taxes for the coming year. But don't wait until the last minute.Ask friends and family for recommendations. Ask about credentials and professional designations. There are two designations to look for in a tax preparer.

Enrolled agents (EAs) have passed rigorous IRS exams and are certified to represent clients in tax court. CPAs, or certified public accountants, have also passed several examinations and are licensed to practice by the state.Interview your top candidates to see if you feel comfortable with them. Do they have the expertise for your specific situation? And will they be available for questions after tax season is over. When you first meet to talk about your taxes, be prepared to talk about your personal life. Your preparer isn't just being nosy.

Personal details can have important tax implications. Are you planning to get married or divorced? Are you looking to buy a house? Such life events show up on your tax return as dollars and cents.Savvy overseeing of your financial books will enable you to build a life and/or company that thrives. And it's literacy that enables you to do that..

Tax Tips to Save You Time and Money

It's nearly that time again. April 15--the income tax deadline--is rapidly approaching. There aren't many taxpayers in this world who can honestly say that they have not needed help completing their tax forms. Since paying taxes is an annual event, you would think that we would get better at the procedure from year to year, but this is certainly not the case. We need help nearly every year because tax laws change dramatically, withholding tables are adjusted and our individual tax situation from deductions to dependents vary from year to year.If you are like most people you haven't yet gathered all of your tax records, let alone filed your return.

Before you get started, take some time to check on some deductions you might possibly qualify for, but are often overlooked. Points on home refinancing; health insurance premiums (including some long-term care premiums); non-cash charitable contributions (those summer clothes you gave to Goodwill); higher education expenses; work-related...

Tax Tips to Save You Time and Money

Tax help > Tax Tips to Save You Time and Money

Tax Information for Small Businesses

(ARA) - The IRS publishes a lot of tax information to help small business owners and there are many ways to get it. You can always visit an IRS office to pick up copies of IRS forms and publications, although the IRS continues to make it easier for you to get these materials without leaving your office or maybe even your home.The IRS will send you forms and publications free of charge when you call them at 1-800-829-3676 with your request. Normally, you will receive the materials within 10 days, although there is another way to get tax materials right away.If you have access to a personal computer, you can browse and download IRS forms and publications from the IRS Web site at www.irs.gov.You also can get interactive help with your taxes while you're on line. For the latest information on business-related tax topics, click on the "Tax Info for Business" section. You'll find links to other Internet sites that may be helpful for your type of business.Tax Fax is another way to get business...

Tax Information for Small Businesses

Tax help > Tax Information for Small Businesses

Equipment Leasing

A lease is basically a contract that transfers the right to possession. Equipment leasing companies provide customers with the privilege to use their equipment for a limited time frame with a monthly payment. Leasing equipment for official purposes, as opposed to purchasing equipment, offers any business flexibility in financing.

Equipment leasing is used for vehicles, agricultural equipment, medical equipment, restaurant equipment, construction and technology equipment. A typical equipment leasing company will require a few monthly payments up front, compared to a conventional financer who will usually ask for about 10 to 20 percent up front.

Some advantages to equipment leasing include: your monthly payments can be viewed as operating costs, and offer good tax benefits in the process. It is therefore important to consult your tax advisor to ascertain whether equipment leasing is the most beneficial alternative for your company.

Many companies...

Equipment Leasing

Tax help > Equipment Leasing

Roth IRA Withdrawals

Roth IRAs are individual saving schemes meant for people with taxable income who meet certain eligibility criteria. They are different from the traditional IRA, in that the contributions made to them are subject to tax deductions, but the earnings themselves are tax-free. This means that the Withdrawals are not subject to taxation. Also, you can have more than one Roth IRA account, but there is a limit to the amount of contributions that you can make in them. Your total contributions in all the accounts cannot exceed $4,000, or 100% of your adjusted gross income, whichever is less.

There are some rules and regulations involved with the Withdrawals of the earnings accrued from these savings.

First and foremost, if you have multiple Roth IRA accounts, you can withdraw money from any of the accounts. Yet the Withdrawals themselves have to be made in a certain order, regardless of the account you choose to withdraw from. The order to be followed is: first of all you have...

Roth IRA Withdrawals

Tax help > Roth IRA Withdrawals

How To Get An Extension To File Your Business Tax Returns

Yes, the tax season is upon with the first filing date for some businesses being March 15, 2005. If you can't imagine getting your tax returns together by that date, you need not worry. The IRS automatically gives you an extension if your file the appropriate form. As you might expect, there are different forms for different businesses. An Important Note It is vitally important that you understand that an extension to file taxes is not an extension to PAY taxes.

The IRS will give you a break on the filing date, but it wants the money now! If you anticipate that you will owe taxes, you need to send in the appropriate payment. Failure to do so could result in interest charges when you eventually get around to filing your returns. Corporations If you conduct business as a corporation with a fiscal year-end of December 31st, you are required to file your 2004 tax returns on or before March 15, 2005. You can get an automatic extension, however, by filing form 7004 before the March...

How To Get An Extension To File Your Business Tax Returns

Tax help > How To Get An Extension To File Your Business Tax Returns