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Child Care Tax Deduction 101

Oct 29

Posted by admin in Taxes

For parents of children 12 and under, the child care tax deduction can be a life saver to working parents. Parents should become familiar with the tax information regarding the child care tax deduction. If they aren’t sure what to do, there are many tax professionals which can offer tax advice on how to claim this deduction. All of this can help them when it comes time to file taxes online.

The first thing a parent has to know is the criteria for the child care deduction. The criteria are as follows:

The child must be 12 years old or younger. If the child is 13 or older, you must show that the child is either physically and/or mentally unable to care for themselves. If the child is 13 and up and is mentally or physically disabled, you may also deduct adult daycare expenses.

‘-You must provide a home for the child or adult dependent by paying over half the expenses for the maintenance of the home for the dependent. You can not deduct child care or dependent care for a person that does not live with you. The childcare provider you employ can not be another dependent. This means that if your older children watch your younger children, this can be not be used for the child care deduction unless they are 19 years old or over and no longer qualify as a dependent.

Your child care provider has to give you their name or business name if there is one, an address, and a Social Security or Employer Identification Number. This information will be reported on your 2441 form so that you can claim the Child and Dependent Care Tax Credit.

Parents have other deductions that they can claim on their taxes online or on paper. There is the Child Tax Credit, which can be up to $1,000 per qualified child. A child qualifies if the child’s living expenses are paid by the parent for more then one half of the year and the child is not being claimed by anyone else. The child must also be 16 or younger by the end of the year to qualify as a dependent.

Another deduction for parents is the Earned Income Tax Credit. It was designed to help lower income families with their day to day expenses. If you need tax advice on how to claim this credit, you can check out the IRS website or contact a tax professional.

Checking yearly for changes in tax laws is always a good thing to start with, as there may be new deductions to help struggling families with their taxes.

Many people opt to buy tax preparation software to help them file their taxes. The programs walk the taxpayer through the filing process, asking them questions and using their answers to determine what they qualify for. If you are unfamiliar with how best to fill out your taxes, it might be worth buying one of these programs. They typically come with an option that all you to file taxes online right through the program. This can make the tax process much easier and can provide the taxpayer with additional savings.

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The Top Five Reasons Why San Antonio Real Estate Market is Looking Up

May 10

Posted by admin in Real Estate

For everyone still reeling from the tough San Antonio real estate market in 2010, it’s now time to get up, dust yourself off, and look forward to a more promising 2010. Don’t expect the market to surge ahead quickly, though, as regrouping from the last year’s national recession is going to take time. However, many real estate professionals are quite optimistic that 2010 will be a better year for anyone involved in the San Antonio real estate industry.

The San Antonio Board of Realtors, in fact, has projected not only an increase in the number of home sales, but also price appreciation for San Antonio real estate. In other words, for everyone who has managed to survive last year’s hit, it’s going to be a much better year ahead.

There are some sticking points in the San Antonio real estate market, make no doubt. For example, home builders are still finding it difficult to get financing to complete projects. And on the other side of the loan process, many would-be homeowners are still being turned down by banks for home loans. Short sales and foreclosures have no doubt had a negative impact on the lending industry over the past year, so it only makes sense that lending will continue to remain fairly tight during the upcoming year.

However, the San Antonio real estate market for homes priced under $200,000 are sure to experience the biggest jump, both in sales and real estate appreciation. There is currently a 5.9-month supply of homes priced under $200,000 on the market; a six-month inventory is generally considered to a balanced market.

Combine that with low interest rates and the extension of the federal homebuyer tax credit, and there appears to be plenty of interested buyers entering the real estate market in 2010.
Homes priced over $1 million are still struggling, though, and will likely to continue to struggle throughout the upcoming year. In fact, this market is now inundated with a 61 month inventory of homes.

Many analysts see the upswing in the San Antonio real estate market to continue, as demand for homes usually coincides with consumer confidence, which has continued to improve over the last few months.

San Antonio is also expected to see an increase in its real estate market because job losses continue to decline. As San Antonio starts creating new jobs in the upcoming year, San Antonio real estate demand will certainly follow suit. San Antonio recently announced the addition of thousands of new jobs in the military and private sector, which means that there will be an influx of workers looking for homes.

A recent study conducted by Metrostudy found that builders in San Antonio are expected to build about 8,000 homes this year, a nearly 12 percent increase from 2008. The sales incentives and discounts being offered by builders are sure to spur the growth of new homes sales throughout San Antonio, and are sure to help rebuild San Antonio’s bruised housing market.

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Taxes: The Plan Ahead, Not The Look Behind

Mar 27

Posted by admin in Taxes

The word “taxes” has a negative affect on people. It makes us look away, it upsets us and we make lots of grunting noises. But that?s looking at the previous year and preparing for the tax season. What about planning for 2006? Can we actually plan ahead for taxes?

Yes, it is possible. It?s important to begin our discussion on taxes by knowing what tax changes are taking affect. So I?d thought I?d get you started in the right direction. Here are some of the tax benefits coming your way in 2006 for your 2007 filings.

- Standard Deduction will increase to $10,300 for married couples filing jointly, $5,150 for singles and $7,550 for heads of household.

- Save more money with retirement contributions into your 401(k) or 403(b). Limits have been increased to $15,000. If you are at least age 50 before the end of 2006, you can now contribute an additional $5,000. Every little bit helps.

- Estate and Gift Tax are certainly getting a gift. The exception amount increases to $2M and the maximum marginal tax rates dropped 1% to 46%.

- Hybrid cars are the new ?in? thing and you?ll get rewarded for it too. But buy it fast to get your $2,400 tax credit. It?s only good for the first 60,000 vehicles per manufacturer.

- Income Limits Increase for Deductible IRA’s. Although regular IRA and Roth contributions limit of $4,000 haven?t changed, people age 50 or older can put in another $1,000 for a total of $5,000 for the year.

- Child Tax Credit will remain at $1,000 per each qualifying child. Better something than nothing.
?You can put a little bigger bow on the Gift Tax Annual Exclusion package. You can now give an extra $1,000 or $12,000 for the year without filing a gift tax return.

- And a little something for you. Personal exceptions have increased from $3,200 to $3,300 for the year.

So now you have it. Tax benefits that you can count on for 2006. Plan ahead and put that little extra away for those later years. When you?re retired, you can finally look behind and thank yourself for planning ahead.

John Michalak is a well-known local authority and financial educator in the matters of retirement finances. He assists retirees

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What Is A 1031 Exchange?

Jul 20

Posted by admin in Taxes

The IRS has an exchange provision that allows you to put the extra money you make off the sale of real estate into another equal or higher value property without paying taxes on the capital gains. You can?t do this on your primary house, but you can on a beach condo or a rent house. There are some things the experts suggest you do.

Get what the IRS calls a ?Qualified Intermediary.? They will charge between $500 and $1500 for the deal. They escrow the money from the time you sell to the time you buy the new property. You must trade up within 45 days of selling and close the deal within 135 days. Make sure your ?QI? is bonded and insured for negligence and fraud.

Watch the details. For example, if you bought a property for $200,000 and have depreciated it out for taxes to $100,000. Now you sell it for $400,000. Think you?ll roll over $200,000? Nope. The IRS says you have to drag the depreciation with you ? only $300,000 total.

Also, don?t rush to trade up. Sometimes its best just to pay the tax. Don?t end up with something worse or something that appreciates slower than what you had. Its not always a good deal.

Check out 1031.org for the Federation of Exchange Accomodators.

Stuart Simpson
http://www.voip-telephony-review.com/

Writen By : Stuart Simpson

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Getting A Tax Credit For Your Kids

Jul 16

Posted by admin in Taxes

As you know, raising a family is a full time job and can put stress on your finances. Fortunately, you can claim a tax credit to help cut your IRS bill if you have kids.

Getting a Tax Credit for Your Kids

With a tax deduction, you are reducing the total amount of adjusted gross income you have. For instance, if you earned $50,000 dollars in 2005 and take a $1,000 deduction for something, you?ll have to pay tax on $49,000 dollars in earnings. Put another way, the $1,000 tax deduction will save you a hundred dollars or so in the amount you have to send to the IRS.

A tax credit is a beautiful thing. It is designed to reduce the amount of taxes you on a dollar for dollar basis. Taking our example above, you would not deduct a $1,000 tax credit from the $50,000 you earned. Instead, you would go to the tax tables and determine the amount of tax you owe on the $50,000. Let?s say the tax tables reveal you owe $9,000. You would reduce this amount by the $1,000 tax credit and pay $8,000 dollars to Uncle Same. Put another way, tax credits are tax deductions on steroids!

If you are raising children, you may be able to claim a tax credit for each one. They must be under 17 at the end of the tax year, a U.S. citizen, your child and a dependent. Adopted children fit within the tax credit as do stepchildren and certain foster children.

This tax credit, however, does have some limitation. The primary issue is something called the phase out. If you make more than a particular dollar figure, the tax credit is either reduced or eliminated depending upon your particular circumstances. The phase out start when your adjusted gross income exceeds the following amounts:

1. Married filing Jointly: $110,000

2. Married filing Separately: $55,000

3. All Other Designations: $75,000

It is important to keep in mind that this tax credit is not a profit center. If you owe the IRS $4,000, but can tax a tax credit for 5 children, you will not get $1,000 back from the IRS. Instead, you tax bill is simply canceled out.

Richard A. Chapo is with BusinessTaxRecovery.com – providing information on tax and taxes. Visit us to read more tax articles and our new tax credits page.

Writen By : Richard Chapo

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Small Business Tax Credit – Americans With Disabilities Act

Jul 7

Posted by admin in Taxes

Many small businesses complain when confronted with the expense of complying with the Americans with Disabilities Act. Most do not realize that there are a number of tax incentives available to offset the costs. Importantly, one tax incentive comes in the form of a tax credit, which is far more valuable than a tax deduction when it comes to creating tax savings.

Disable Access Tax Credit

If you make your small business accessible to persons with disabilities, you can take an annual tax credit. Your business is eligible if you earned one million or less the previous year or had 30 or fewer employees. If you meet this test, you can claim a tax credit of 50 percent of your expenditures to a maximum of $5,000. Since this is a tax credit, it is deducted from your total tax liability.

To claim this tax credit your expenditures must be paid or incurred to enable your business to comply with the Americans with Disabilities Act. Expenditures might include:

1. Purchase of adaptive equipment or modification of equipment;

2. Production of print materials in alternate formats such as Braille or audio; and

3. Sign language interpreters for employees or customers.

Modifications to buildings or offices also qualify as long as two criteria are met. First, the modifications cannot be construction of something new. Second, the building must have been in service prior to November 5, 1990.

Barrier Removal Tax Deduction

All businesses can take a tax deduction for expenditures incurred to remove physical, structural or transportation barriers for disabled individuals in the work place. This tax deduction carries no restrictions in regard to revenues earned or number of employees. Businesses may claim up to $15,000 a year as a tax deduction. Expenditure amounts exceeding this amount may also be claimed, but are subject to depreciation calculations.

To claim the barrier removal tax deduction, your expenditures must be related to making a facility or vehicle accessible to disabled persons. Examples include:

1. Providing ramps and curb cuts;

2. Making restrooms accessible to persons in wheelchairs; and

3. Expanding the width of sidewalks to at least 48 inches.

Significant Tax Break

Small business owners can double their tax saving pleasure by claiming both of these tax incentives in the same tax year. If a small business spent $20,000 creating wheelchair access to an office, it could take a $5,000 tax credit and a $15,000 tax deduction.

These tax incentives are in place to significantly reduce the burden of complying with the Americans with Disabilities Act. If you failed to claim the credit or deduction during the last three tax filing years, you should file amended tax returns to get a refund.

Richard A. Chapo is with http://www.businesstaxrecovery.com – recovery of business taxes through tax help and tax relief. Visit http://www.businesstaxrecovery.com/articles to read more business tax articles.

Writen By : Richard Chapo

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