Some tax breaks are available every year, and you can easily remember to file them every time tax season comes around. These tax breaks include tax credits for income earned, mortgage interest deductions, certain retirement plan deductions, charitable contribution deductions, and child care deductions. However, new tax breaks are introduced every year as well, and you need to find out what they are in order to maximize your tax deductions. Even if you decide to opt for the standard deduction this year, you should try to learn about other deductions that you may be eligible for in the future, and determine whether they are worth itemizing. Here are some of the more notable tax breaks for 2011.
Social Security Tax Deduction
The 2011 payroll tax cut will reduce the amount of social security taxes that you need to pay. If you are self-employed, you have to remember to include the deduction in the “employee” portion when you are filing your social security taxes.
Energy Efficiency Tax Credits
The 2011 energy efficiency tax breaks are not as generous as those offered in the previous year. However, there are new tax breaks that will give you substantial credits when you purchase new appliances, fixtures, and other things that can make your home more energy efficient, such as water heaters, biomass stoves, insulation, and windows. If you are planning to install a solar, wind, or geothermal system, you can get a tax deduction that is worth 30% of the total installation cost. Considering the high costs of installing such systems, this new tax break can help you save a large sum of money. For instance, if the total cost of installing a solar hot water system is $10,000, you can save $3,000 because of the deduction.
Commonly Overlooked Tax Breaks
When you are filing your tax returns, it is essential that you try to remember all the expenses that you have made in the previous year, and figure out which ones are tax-deductible. The most effective way to ensure that you do not miss any deduction is to use tax preparation software such as TurboTax. Here are some of the most commonly overlooked tax deductions:
Medical Expenses
Other than getting tax deductions for FSA or HAS contributions, you are also entitled to deductions for medical expenses that are not covered or reimbursed by your health insurance. Such deductions can be itemized if they amount to 7.5% or more of AGI.
Job Hunting Expenses
If you are seeking new employment in the same field, you are allowed to deduct the costs of career coaching, resume services, transportation for going to interviews, and others.
Moving Expenses
If your new job requires you to relocate to a place that is more than 50 miles away, you are eligible for deductions for moving expenses and other related travel expenses.
Taxes Paid Elsewhere
Tax Breaks
You can get deductions for taxes that you paid to other entities, such as property taxes and local or state income tax. If you are not required to pay state income tax, you can file a deduction for sales tax.
Monday, September 26, 2011
Thursday, September 22, 2011
New Tax Breaks for 2012
Every year, the IRS will introduce a number of new tax breaks. While some of these tax breaks only benefit select groups of people, others can bring substantial savings to all taxpayers. It is recommended that you keep yourself updated with the new tax breaks that are implemented every year, so that you will not miss out on any deduction that you may be eligible for. Here are some of the more important tax breaks that were introduced in the year 2011.
Social Security Tax Break
If you are an employee, you were required to pay 6.2% of your initial $106,800 annual wages earned to Social Security last year. This means that for every $100 of wages you earned, you had to pay $6.20. This amount has changed with the new social security tax break. Presently, you only have to pay a social security tax of 4.2%, which means that you will have more money to spend.
Higher Standard Deductions
If you are filing your taxes with the standard deduction method, the higher standard deductions that were implemented this year may be beneficial to you. The standard deduction for single taxpayers and married taxpayers who are filing separately is now $5,800, which is an increase of $100 from the previous year. For those who are married and filing jointly, the standard deduction is $11,600. If you are filing as a head of household, you will be allowed a standard deduction of $8,500.
Personal Exemption
There is also a slight increase in the personal exemption amount this year. While the personal exemption amount last year was $3,650, this year’s amount is $3,700.
PEP and Pease Limitations
If you are a high-income taxpayer, you will be glad to know that there is a temporary repeal of the “personal exemption phase-out”, or PEP, and Pease limitations. A reduction in personal exemptions and an increase in adjusted gross income, as well as a 3% reduction of itemized deductions at the top of the brackets, ensure that you will be able to hold on to your personal exemptions and get the full value of your itemized deductions. This temporary repeal is expected to last for two years.
Tax Breaks for Going Green
Although a number of important “going green” tax benefits from previous years are no longer available, there are new ways for you to save on taxes this year. The original hybrid vehicle credit has been replaced by a plug-in vehicle credit. If you purchase a plug-in vehicle, such as the Chevy Volt, Ford Focus Electric, or the Nissan Leaf, you will be entitled to a federal tax break of $7,500. You can use this credit to lower your regular tax or alternative minimum tax. If you use an electric car conversion kit to convert your gas-guzzling car into a plug-in car, you can avail of a federal tax credit that is equivalent to 10% of the total conversion cost. The maximum amount for this tax credit is $4,000. There is also a new tax break for installing solar panels for heating water or generating electricity in your home, which is 30% of the total cost of installation.
Social Security Tax Break
If you are an employee, you were required to pay 6.2% of your initial $106,800 annual wages earned to Social Security last year. This means that for every $100 of wages you earned, you had to pay $6.20. This amount has changed with the new social security tax break. Presently, you only have to pay a social security tax of 4.2%, which means that you will have more money to spend.
Higher Standard Deductions
If you are filing your taxes with the standard deduction method, the higher standard deductions that were implemented this year may be beneficial to you. The standard deduction for single taxpayers and married taxpayers who are filing separately is now $5,800, which is an increase of $100 from the previous year. For those who are married and filing jointly, the standard deduction is $11,600. If you are filing as a head of household, you will be allowed a standard deduction of $8,500.
Personal Exemption
There is also a slight increase in the personal exemption amount this year. While the personal exemption amount last year was $3,650, this year’s amount is $3,700.
PEP and Pease Limitations
If you are a high-income taxpayer, you will be glad to know that there is a temporary repeal of the “personal exemption phase-out”, or PEP, and Pease limitations. A reduction in personal exemptions and an increase in adjusted gross income, as well as a 3% reduction of itemized deductions at the top of the brackets, ensure that you will be able to hold on to your personal exemptions and get the full value of your itemized deductions. This temporary repeal is expected to last for two years.
Tax Breaks for Going Green
Although a number of important “going green” tax benefits from previous years are no longer available, there are new ways for you to save on taxes this year. The original hybrid vehicle credit has been replaced by a plug-in vehicle credit. If you purchase a plug-in vehicle, such as the Chevy Volt, Ford Focus Electric, or the Nissan Leaf, you will be entitled to a federal tax break of $7,500. You can use this credit to lower your regular tax or alternative minimum tax. If you use an electric car conversion kit to convert your gas-guzzling car into a plug-in car, you can avail of a federal tax credit that is equivalent to 10% of the total conversion cost. The maximum amount for this tax credit is $4,000. There is also a new tax break for installing solar panels for heating water or generating electricity in your home, which is 30% of the total cost of installation.
Tuesday, June 7, 2011
New Tax Laws for 2012
It can be a tough game keeping up with taxes. Every year many tax laws and new inheritance tax laws are signed into existence and many are also signed out of existence. Taxes are like an evolving, ever changing monster, and keeping up with all these changes can get pretty tiresome.
One of the biggest reasons they change so much is because so many people look for loopholes to get out of paying taxes, so the laws have to become more and more complicated to cover the loopholes people are constantly exploiting. However, for the rest of us who pay our taxes responsibly, it means more work come tax season. Whether it's new car tax laws or federal gift tax laws, there's always a long list of changes. Here are a few of the new tax laws you can expect next year and the coming years:
One of the biggest reasons they change so much is because so many people look for loopholes to get out of paying taxes, so the laws have to become more and more complicated to cover the loopholes people are constantly exploiting. However, for the rest of us who pay our taxes responsibly, it means more work come tax season. Whether it's new car tax laws or federal gift tax laws, there's always a long list of changes. Here are a few of the new tax laws you can expect next year and the coming years:
- Firstly, there's the popular First Time Homebuyer Tax Credit, which the Obama Administration has chosen to expand. The income limits for qualification have been widened as well, making it so even more people are eligible for the credit!
- Another of the new tax law changes is the Payroll Tax Credit, where workers gain 6.2 percent credit of their income. It stops at $400 for single filers and $800 for married filers. Employees don't receive it as a rebate check, but instead as credit in advance through lower income tax withholding in each paycheck.
- Standard Deductions will be $11,400 for married couples filing jointly, like it was in 2009. It's $5,700 for single filers filing standard tax deductions, which is up by $250 over last year, and it's $8,400 for heads of households, which is up $50 from last year. Also if you lived in a presidential declared disaster area, non itemizers can add causality losses.
- Usually the amount of personal exemptions and itemized deductions you can take are phased out as your income level rises. For 2010, another new tax law repeals those limits on income levels, and that repeal is extended for two years by a recent tax relief act.
- Business can now expense up to $500,000 for equipment placed in service, and the annual investment limit was raised to $2,000,000! This New Tax Law for 2010 and 2011 will make it so you wont lose the ability to expense unitl you place more than $2,000,000 of assets in service. For 2012, it drops to $120,000.
- The Hope Credit will be replaced by a new credit: the American Opportunity Tax Credit, which provides $2,500 per year for four years of college, books included. For single filers, it begins to phase out at an income of about $80,000, and for joint filers it's at $160,000. 40% of it is refundable if the credit is more than your income tax liability.
- If you're age 70 1/2 or older, you can donate $100,000 of your IRAs to charity throughout 2012 and you can deduct the donation as a charitable contribution. The Adjusted Gross Income cap on charitable contributions will not limit your deductions.
- If your Adjusted Gross Income is $89,000 or less (married filing jointly) or $56,000 (head of household or single) and if you're covered by a retirement plan at work you can take a full IRA deduction in 2010. If your Adjusted Gross Income reaches $109,000, you can take a partial IRA deductions.
New Tax Laws
New Tax Laws
There are so few constants in life in anymore, maybe there never were, but it’s possible that technology may be largely responsible for teaching us that from time to time it’s our duty to make sure that we have the most updated information in order to perform any task in life to the fullest. New federal income tax laws are especially important because of their obvious potential to redefine how you plan on managing your finances.
Not only will we see new tax laws from year to year, but new information on tax forms, renewed tax programs with different rates and limits, and wholly new programs which might call for a small celebration for some green-thinking or home-based business person.
But you won’t be getting any letters in the mail that will explicitly relay the updates on new tax laws just because you’re a tax payer, no, it’s your job to know.
Are the new federal standard income tax deductions going up or down this year? What about the new tax laws for married couples? Will you qualify for the earned income tax credit or any tuition related tax breaks? What about the gift tax exclusion or mileage deduction amount? Much of this information will actually be handy and even necessary to know before you sit down to file you taxes.
As you’re already finding out the internet can in fact be a wonderful source of information in regards to any hobby, process, institution, chore, legal obligations, finances, etc etc, the list goes on and on.
New Federal Income Tax Standard Deductions
However there is a way in which you can have access to the new tax laws without having to do nearly any sleuthing at all. Surprised? You shouldn’t be, the internet has come a long way since 56k dial up emailing. Online tax software like TurboTax Online will actually pair you up with all of the deductions and credits and breaks that are applicable to you automatically!
Of course you could still do things the old fashioned way, make a phone call, get an appointment, show up to someone’s office, but then you’re relying on human error or even slight fatigue which can both easily get in the way of you getting the most out of your money.
Not only are there many credits and new federal income tax standard deductions you might miss out on under new tax laws, but most tax returns experience delays and even audits (yikes) simply because of incorrectly entered information even if it’s just your address or personal information.
With online tax software your work is checked and double-checked and won’t be filed until all information is correct and you’ve gone over the choices that the software will offer up to you in regards to the new federal income tax laws.
Life has only gotten busier during this last decade, so why make yourself work harder and longer when the real work can be completed along with a 100% guarantee of getting the most money back possible?
The calculations and tax law sleuthing are no longer necessary!
TurboTax Online's safe and secure network has and will continue to win awards and the allegiance of tax payers every year. Between a notoriously secure network in a dangerous online world, their hundreds of free access tax articles and comprehensive and streamlined support system it’s becoming hard for any other service to out-do them.
For instance, if you had a specific question about a particular new federal income tax law, then all you would have to do is get onto their site, either use the search bar to look for the information, or pose a question to what’s called their “live community” .
The live community is made up of tax professionals and experienced taxpayers who do their best to answer questions like most other question forums. The thing is, if you need to know something specific about a complicated tax situation like tax liens, then this would be the place to go.
Like mentioned above, it’s your job to know what the new tax laws are going to look like so that you can take the right steps towards to managing your finances, property, and miscellaneous resources because many of us play things in a way where we may only be breaking even for a little while until we get over that financial hump, and changing that one little thing which might afford you hundreds of dollars back according to any new tax laws just might end being that one thing that gets you ahead!
There are so few constants in life in anymore, maybe there never were, but it’s possible that technology may be largely responsible for teaching us that from time to time it’s our duty to make sure that we have the most updated information in order to perform any task in life to the fullest. New federal income tax laws are especially important because of their obvious potential to redefine how you plan on managing your finances.
Not only will we see new tax laws from year to year, but new information on tax forms, renewed tax programs with different rates and limits, and wholly new programs which might call for a small celebration for some green-thinking or home-based business person.
But you won’t be getting any letters in the mail that will explicitly relay the updates on new tax laws just because you’re a tax payer, no, it’s your job to know.
Are the new federal standard income tax deductions going up or down this year? What about the new tax laws for married couples? Will you qualify for the earned income tax credit or any tuition related tax breaks? What about the gift tax exclusion or mileage deduction amount? Much of this information will actually be handy and even necessary to know before you sit down to file you taxes.
As you’re already finding out the internet can in fact be a wonderful source of information in regards to any hobby, process, institution, chore, legal obligations, finances, etc etc, the list goes on and on.
New Federal Income Tax Standard Deductions
However there is a way in which you can have access to the new tax laws without having to do nearly any sleuthing at all. Surprised? You shouldn’t be, the internet has come a long way since 56k dial up emailing. Online tax software like TurboTax Online will actually pair you up with all of the deductions and credits and breaks that are applicable to you automatically!
Of course you could still do things the old fashioned way, make a phone call, get an appointment, show up to someone’s office, but then you’re relying on human error or even slight fatigue which can both easily get in the way of you getting the most out of your money.
Not only are there many credits and new federal income tax standard deductions you might miss out on under new tax laws, but most tax returns experience delays and even audits (yikes) simply because of incorrectly entered information even if it’s just your address or personal information.
With online tax software your work is checked and double-checked and won’t be filed until all information is correct and you’ve gone over the choices that the software will offer up to you in regards to the new federal income tax laws.
Life has only gotten busier during this last decade, so why make yourself work harder and longer when the real work can be completed along with a 100% guarantee of getting the most money back possible?
The calculations and tax law sleuthing are no longer necessary!
TurboTax Online's safe and secure network has and will continue to win awards and the allegiance of tax payers every year. Between a notoriously secure network in a dangerous online world, their hundreds of free access tax articles and comprehensive and streamlined support system it’s becoming hard for any other service to out-do them.
For instance, if you had a specific question about a particular new federal income tax law, then all you would have to do is get onto their site, either use the search bar to look for the information, or pose a question to what’s called their “live community” .
The live community is made up of tax professionals and experienced taxpayers who do their best to answer questions like most other question forums. The thing is, if you need to know something specific about a complicated tax situation like tax liens, then this would be the place to go.
Like mentioned above, it’s your job to know what the new tax laws are going to look like so that you can take the right steps towards to managing your finances, property, and miscellaneous resources because many of us play things in a way where we may only be breaking even for a little while until we get over that financial hump, and changing that one little thing which might afford you hundreds of dollars back according to any new tax laws just might end being that one thing that gets you ahead!
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