The IRS Deductions Blog

Archive for May, 2009

Question: Are pre-Tax Deductions such as pension, medical and dental plans considered tax Deductible Expenses?

I have spent over $3,200 in out of pocket work related expenses in 2006 and I know that that amount is tax deductible. However, I have also paid about $2,600 in pre-tax deductions in pension, medical and dental plans. Is that $2,600 considered tax deductible in the same was as the other $3,200? Could I legally claim $5,800 in tax deductible expenses for 2006?

Answer: Pre Tax Deductions are just that… They come out of your income before your taxes do so you are not taxed on that money to begin with. You can not take the deduction on those. Your out of pocket work related expenses are the only expenses deductible.

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Inscape Corporation Announces Third Quarter Results

HOLLAND LANDING, ONTARIO– (Marketwire – March 4, 2010) – Mr. Madan Bhayana, Chief Executive Officer of Inscape (TSX:INQ), a leading designer, manufacturer and marketer of office systems, storage and architectural wall solutions for commercial office environments, announces the following financial results for the third quarter ended January 31, 2010:

I’m Using Turbo Tax

Question: income tax medical deduction?

In 2006 we had to pay a lot for medical expenses (deductibles, etc, our insurance isn’t great). The main expense was heart surgery our baby had in October 2006. With the back-and-forth between the hospital and our insurance company, including some incorrect rejections the insurance company made initially , we didn’t get all of the bills (and therefore make all the payments) until 2007. Can we claim the 2007 payments on the 2006 surgery on our 2006 taxes (I want to b/c then we would exceed the 7.5% AGI….but I’m thinking that wouldn’t be the way the IRS works?)

Answer: You can deduct medical expenses in the year you paid them. So you cannot claim expenses paid in 2007 on your 2006 tax return.

You can also deduct medical mileage including trips to the hospital, doctor, or pharmacy.

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The #1 Tax Shelter … Your Business: It’s Not What You Earn – It’s What You Keep (Tax Saving Reports for Small Businesses) IMPORTANT – It’s not about what you earn – it’s about what you keep! This is an easy to understand manual that answers the questions small business owners have about saving money on their federal taxes. This book is a collection of 12 Tax Saving Reports that have been written in clear, understandable language. We will answer your questions about mileage deductions, writing off meals and entertainm…

Of 4.5 Million US Tax Filers With Income Over $200,000, 13,142 Paid No US, 4,354 Paid No Worldwide Income Tax

The latest IRS Statistics Of Income Report is out. In it, the IRS focuses on the wealthy segment of US population, i.e., those falling over the proverbial $200,000/year cutoff. What the IRS finds, is that in 2007, of the 4,576,315 tax returns with expanded income of $200,000 or more, 13,142 (0.287%) had no US income tax liability, and 4,354 (0.095%) had no worldwide income tax liability. These …

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Question: Question about IRS Tax Form 3800 General Business Credit?

I have a question about tax form 3800 “General Business Credit” I have a full time job so taxes are being taken out of my check etc. But I also have my own painting business. I have a contract with a local apartment complex. They told me at the end of the year they would send me tax form 1099 Misc.

Anyway I will make over 5k and I was wondering if I would be able to use tax for 3800 for anything. I was looking over the form and in Part II section 9 it tells me for individuals to enter the amount from form 1040 line 39. My question is am I able to deduct the standard deduction which is “single” “head of household” ect. depending on which one I qualify for on the 3800 tax form also?

If I am thinking correctly that would be a double deduction, once from form 1040 and then from form 3800. Can anyone help me with this or am I really missing something.

Thanks

Answer: You will need to file a Schedule C this year in addition to your 1040 form. On the Schedule C you will list all of your business income and expenses. You pay tax on the bottom line. You will also be required to pay self-employment tax. Form 3800 is a business credit form which is only used in certain instances. These are credits issued to businesses if they hire people on welfare or if they start a retirement plan among many others. These credits are taken using Form 3800.

If you are confused, you should seek advice from a tax professional.

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Classic Internal Revenue Service Business Tax Preparation Film DVD: 1970s Small Business Finance & Accounting Tax Preparation & Advice Film $12.99 No one likes to pay taxes – whether you’re an individual or a business. The complexity, anxiety and frustration of the bureaucratic process affect us all. There’s the fear of filing wrong and being penalized, the fear of a thorough, unexpected audit, and the disappointment of forking over a large chunk of hard-earned money to Uncle Sam. This vintage film breaks down the basics of business taxes fo…

J.K. Lasser’s Your Income Tax 2010: For Preparing Your 2009 Tax Return $5.00 America’s number one bestselling tax guide offers the best balance of thoroughness, organization, and usabilityFor over half a century, more than 39 million Americans have turned to J.K. Lasser for easy-to-follow, expert advice and guidance on planning and filing their taxes. Written by a team of tax specialists, J.K. Lasser’s Your Income Tax 2010 includes all the outstanding features that have ma…

Taxes 2008 For Dummies $0.03 “The best of these books for tax novices.”—Worth magazineCan a fantastic tax-prep guide actually make doing your taxes fun? Probably not, but you’ll have a lot more fun doing your taxes with the help of Taxes 2008 For Dummies than you would without it.This uncommonly friendly tax guide weaves you through the tax-filing maze, walking you line by line through the most common forms for fast, easy f…

IRS & Writers (Be a Successful Writer!, Vol 3) $2.99 This guide contains tips and basics for writers filing US income tax forms. Hobby or business? Deduction or not? Which forms to file, where to get help, and links to useful IRS publications. Advice from a veteran writer’s five decades of filing her own taxes without the IRS ever questioning any deduction or practice. How to time losses vs. profits. Advantages of filing as a small business. Where t…

IRS Tax Tips for 2010 filing season – #1

While the tax filing deadline is more than three months away, it always seems to be here before you know it.

IRS levy – wage levy removal – tax experts

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Cluttered closets may harbor Tax Deductions

Now might be the perfect time to clean out your closets and garage. If you give your gently used clothing and household items to charitable organizations, the New Jersey State Society of Certified Public Accountants (NJSCPA) advises you don’t discard potentially valuable tax deductions with your donation.

WILCO – SPIDERS (KIDSMOKE)

Question: Answer these tax questions please?

1. How much in a year does someone have to live with you if you are claiming Head of Household?
2. What gives you the best tax deduction.. filing MFS, MFJ or Single?
3. How much capital gain do you have to make on the sale of a home, and how long do you have to live in a home before it is not considered a taxable capital gain on the sale?
4. Can the IRS garnish your unemployment benefit if you owe back child support?
5. What is the amount of standard deduction for a single person and can I write off donations if they amount to less than my standard deduction?

I am asking these questions to see how many of you answer correctly. I keep getting thumbs down from ignorant people in here on answers that are perfectly correct and valid. So what is up with all the thumbs down?
10 points for best answer. Thanks.

Answer: 1. Your CHILD or other qualifying person has to live with you more than half of the year and you must have paid more than half of the cost of maintaining your household. However if the qualifying person is your dependent parent they do not need to live with you at all.

2. The highest standard deduction goes to MFJ.

3. There is no limit on the CG you can make. If you meet the tests you can exclude some or all of it from tax, $250,000 if your filing status is Single, HoH, or Qualifying Widow(er) or $500,000 if MFJ. You must own and live in the home for 2 of the 5 years immediately prior to the sale and not have claimed the exclusion within 2 years immediately prior to the sale.

4. The IRS has no control over unemployment insurance. The state that pays the coverage can dock it for unpaid child support, however.

5. For 2007 it’s $5,350. You can only take charitable donations if you itemize and while you COULD itemize your deductions if they totaled less than the standard deduction it would not make sense to do so. However if you file MFS and your spouse itemizes then you must also itemize even if your Itemized Deductions are less than your standard deduction.

However I must challenge your claim that your answers are “perfectly correct and valid.” You have a FEW answers that were OK but quite a few more than were either missing important details or were simply wrong from the start. I’d be happy to provide a laundry list of them if you wish, though someone else has already done so so I see no need to compound the misery. I suspect that you’re either a newbie to taxation OR someone who has failed to keep up on the rapid pace of change in tax law.

Items on Amazon Right Now for Standard Deduction Head Of Household:

Married taxpayer, filing as unmarried head of household, may use full standard deduction.: An article from: The Tax Adviser $5.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA’s on November 1, 2000. The length of the article is 942 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.Citation DetailsTit…

2009 tax deduction amounts

Use our charts to determine what to claim as standard or itemized Tax Deductions.

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