If you owe money on your tax return but can't afford to pay, don't fail to file. Instead, file the return timely and enclose what you can afford. Many taxpayer's do not realize that the penalty for "Failure to File" is 10 times greater than "Failure to Pay".
If you have self-employed income and were issued a form 1099, you should strongly consider making a SEP contribution rather than and IRA contribution. A SEP contribution (Simplified Employee Pension) if sully tax deductible and can usually be larger in amount than an IRA. Further, the SEP gives you other options an IRA doesn't.
You can deduct certain educational expenses. In general, if the education is required by your employer or is to improve your skills in your existing profession, you can write it off. Nowadays, with the need for higher education to secure employment, this is a deduction that can save and should not be overlooked.
You can deduct a credit card charge in the year it was charged, rather than when you paid the bill. So, if you charge a deductible expenses on December 20th, but don't pay the credit card bill until January 17th, you should take the deduction for the prior year.
If you make a charitable contribution of $250 or more, you should obtain written acknowledgement from the charity and keep it with that year's tax file. You do not have to enclose the receipt with your filing to the government. This is an ever changing area of the tax law.
If you have a child you must have his/her social security number in order to claim an exemption. This is true regardless of your child's age. Make you life easy and just fill out the forms in the hospital when your child is born.
No. Gifts to individuals are not deductible as charitable contributions. Only amounts contributed to qualified organizations, such as nonprofit groups that are religious, charitable, educational, scientific, or literary in purpose, or that work to prevent cruelty to children or animals are tax deductible.
The earned income tax credit (EITC) is a refundable credit. (A refundable credit is a tax credit that you may use to generate a refund even if you have no tax liability.) The EITC is available to certain individuals and families who have low to moderate levels of earned income (from wages, salaries, tips, bonuses and/or net earnings from self-employment) and are taking care of at least one child and up to three qualified children. In certain cases, a taxpayer with low earned income and no children may also qualify. The IRS has a variety of tools available to see if you qualify. You can access them at the IRS EITC Home Page.
Forms 1040 and 1040A are the only two forms that have a line where you can report taxable social security. The instructions for both those forms have a worksheet that you may use to calculate taxable social security.
Whether or not you have to file will depend upon whether your earned and/or unearned income exceeds certain limits. See the two sections in IRS Pub 501 called "Self-employed Persons" and "Dependents." If you find that filing a return is not required, you should file a federal income tax return to obtain a refund of any income tax withheld from your pay.
The Mortgage Foregiveness Debt Relief Act was extended another year through 2013, meaning homeowners don't have to pay taxes on the loss of thrie homes through foreclosure or short sales, up to $2 million (or $1 million filing seperately).