The IRS Deductions Blog

Archive for July, 2009

Question: In U.S., a sign-in bonus with a company is subject to tax, medicare and social security?

Or you thing I can avoid these deductions talking to the human resources manager?
If so….do I have to pay taxes for this money anyway?

Answer: A sign-on bonus is taxable income. The employer can do this one of two ways: they can pay you the bonus after you’ve given them your W-4, they put you on their books as an employee, and they withhold all appropriate state and federal taxes.

OR, they can give you the bonus with no taxes deducted, paid through their accounts payable system for NON-payroll vendors. At the end of the year, you will get a 1099 from the company that shows the amount of the bonus. You will have to include that amount on your tax returns and your tax liability will increase. If the amount that you’ve had deducted from your paychecks isn’t enough to cover the entire tax liability, you will have to send the IRS payment in full for the federal taxes.

The IRS also gets a copy of the 1099 and so does the state and the Social Security office, so don’t even think about not reporting it.

Bottom line: if your employer is giving you a sign-on bonus but isn’t deducting any taxes, you should put 20 to 25% of it in savings or investments so that the funds are available next April to pay the taxes. The person who normally prepares your tax return can help you figure out if 20-25% is a good range, too much, or not enough.

Items on Amazon Right Now for Medicare Tax Deduction:

Obtaining tax benefits with health savings accounts.: An article from: The Tax Adviser $9.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA’s on March 1, 2010. The length of the article is 1650 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.Citation DetailsTitle: Obtaining tax benefits with heal…

Physicians ask for federal incentives to fund EMRs.(Practice Trends): An article from: Skin & Allergy News $9.95 This digital document is an article from Skin & Allergy News, published by Thomson Gale on May 1, 2007. The length of the article is 904 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 DetailsTitle: Physicians a…

Amend the Internal Rev. Code of 1986 to repeal the percentage floor on medical expense deductions, expand the use of tax-preferred health care … Act to create a Medicare voucher program. $13.18 The BiblioGov Project is an effort to expand awareness of the public documents and records of the U.S. Government via print publications. In broadening the public understanding of government and its work, an enlightened democracy can grow and prosper. Ranging from historic Congressional Bills to the most recent Budget of the United States Government, the BiblioGov Project spans a wealth of gover…

How your life changes from tomorrow

WORKERS will get more rights, the first-home boost will end and IVF will cost more from midnight.

Payroll Software withholding tax for 2010

Question: Property Tax Deduction question for home purchased in 2007 (this year).?

Purchased in September and paid at closing: county property tax 9 months @541= $4,875
However, my form 1098 shows $529 for property taxes under ‘escrow reconciliation’ and $5,381 “held for disbursements due next year”
So… How much can I deduct?
That $4875 in county property taxes is what I PAID at closing. I don’t understand why it’s not on the Form 1098

and how did box 5 end up with $528.71?

Answer: Did the amount that you paid for taxes actually go to the county/city or were they merely paid into an escrow account. It sounds like the taxes weren’t actually due until this year and were being held in escrow and thus not deductible for last year.

Items on Amazon Right Now for Property Taxes Tax Deduction:

Wallmonkeys Peel and Stick Wall Decals – Mortgage Interest Tax Deduction – Removable Graphic WallMonkeys wall graphics are printed on the highest quality re-positionable, self-adhesive fabric paper. Each order is printed in-house and on-demand. WallMonkeys uses premium materials & state-of-the-art production technologies. Our white fabric material is superior to vinyl decals. You can literally see and feel the difference. Our wall graphics apply in minutes and won’t damage your paint or l…

J.K. Lasser’s 1001 Deductions and Tax Breaks 2012: Your Complete Guide to Everything Deductible $12.43 A straightforward guide to taking tax breaks and deductions on your 2011 tax returnCompletely revised to reflect important changes in this year?s tax laws, J.K. Lasser?s 1001 Deductions & Tax Breaks 2012 will help you take advantage of every tax break and deduction that you may be entitled to. This comprehensive guide is clearly organized by subject matter so you can easily find situations that ma…

First-Time Landlord: Your Guide to Renting out a Single-Family Home (USA Today/Nolo Series) $16.78 Whether or not you call yourself a “landlord”, when you rent out a house you’ll want to do it right! The “Landlording 101″ course for new rental property owners who are first-time landlords by way of an inheritance, divorce, investment, purchase for a family member, or a move to a new house. 90% of small properties are owned by individual landlords, and millions in this group are balancing the…

Lower Your Taxes – Big Time! : Wealth-Building, Tax Reduction Secrets from an IRS Insider $2.90 Strategies from an IRS insider for slashing taxes, maximizing legal deductions, avoiding audits, and more Completely updated for all of the new 2005 and 2006 Tax Laws! Through his years as an IRS tax attorney, Sandy Botkin discovered that most Americans could legally­­ and dramatically­­ cut their tax bills by establishing themselves as independent contractors or businesspersons. In L…

Property taxes due Dec. 31

Here’s an important reminder about taxes and a tax deduction. You have to pay your 2009 property taxes on or before Thursday, Dec. 31, to claim a deduction for those taxes when you file your 2009 federal income taxes.

Tips for Filing Taxes : Real Property Taxes

Whether you live in a warm-weather place, or in a cooler northern climate, it’s hard to stay comfortable and keep your energy bills in check if you don’t have adequate insulation in the Ceiling, Roof. Home insulation is very much required as Insulation keeps cold stuff cold and hot stuff hot.
Perth insulation are one of the best provider of ceiling insulation, most efficient ways to keep your home cool in the winter and warm in the summer; when done properly, it can save you a huge amount of money on your energy bills, too. Installing ceiling insulation is the most important of all because if you will, you will not only protect your house from too much heat during the summer or too much cold in the winter but you will also protect your roof from any damage the extreme conditions may cause.

The best thing is to incorporate ceiling or Roof insulation during the construction of your house, but if you have missed out you can always go in for home insulation at any time to benefit from the numerous advantages that it offers. The few extra bucks you end up spending on the insulation could save you many times that amount in the long run by cutting down on your energy costs. The roofs, wall, ceiling are the most important places that one can insulate in one’s home to prevent heat loss or gain. The money you save on energy bills would increase proportionately to the effectiveness of the insulation you use.

Having a home insulation in Perth is like blanketing your house from heat outside and helps to keep it cool during the hot summer season and warm during the cold winter season. The heat is prevented from seeping inside the house or dissipating outwards from within. It is a great way to keep your energy bills down and also enjoy indoor living during any weather.
By keeping in the warmth in winter and the cool in summer you will save on energy bills. The Federal Government in Perth, Australia estimates that each home will save around $200-$700 per year on their energy bills. The reduction in these energy bills will make a massive difference to the overall greenhouse emissions made by Australia. Thus the insulation rebate in Perth is intended to reduce the amount of energy used in Australian households.

Government has decided to give Insulation Rebate in Perth. The Government rebate is certainly showing their intentions to try and reduce greenhouse gases. The best part about the Insulation Rebate Perth is that it is FREE.

The Insulation rebate Perth is designed so that the Insulation Installer in Perth come and Install the insulation, you sign that it has been completed and the Government pay them. There is no upfront cost, nor any expenses to the homeowner. So to claim your Free Ceiling Insulation visit the experts that are helping thousands of Australians install their free Ceiling Insulation Rebate for Homes.

Roofing Insulation or ceiling Insulation in Perth is very cheaper and there are varieties of materials used for Roof insulation. The list includes fibrous insulation, insulated panels, foam insulation, straw panels. Other than this conventional cellulose, mineral wool and fiberglass can also be used as insulators.You just have to contact Insulation Installer in Perth and you will get roof insulation at much cheaper cost.

Items on Amazon Right Now for Tax Deduction Insulation:

State Fair Community College offering training for ‘green jobs’

State Fair Community College plans to offer two new green job training classes through its Lifelong Learning program.

Federal Home Insulation Energy Tax Credit 2009, 2010

Flexibility, security and growth are the hallmarks of a good investment, and Life Insurance satisfies each criterion. While traditionally Life Insurance served the singular purpose of providing for the kin of the bereaved, today, it has grown and adapted into a savvy savings and investment tool.

If you have decided to invest in Life Insurance, it is essential to understand your requirements and the benefits of each type of insurance.

There are 2 stages to selecting and investing in a Life Insurance Plan.

1. Understanding the Benefits of Life Insurance
Selecting the right Life Insurance policy will ensure that you enjoy both long and short term benefits. While every Life Insurance Policy provides full protection to the beneficiary against the risk of death of the Insurer, it also serves as a smart investment and savings instrument. A few of the benefits of Life Insurance include:
a. Policies from reputed companies are accepted as sole security against loans
b. Section 80C of the Income Tax Act provides for Tax Rebates against Premiums
c. Selecting a plan with insured principal amounts will guarantee security of investment

2. Choosing from the various schemes and options available

Classified by benefits, liability and method and frequency of returns, Life Insurance is of 6 main types:

a. Term Plans offer Insurance for a fixed sum in the event of the Insurer’s death during the tenure of the plan.
b. Endowment Plans offer Life Insurance while simultaneously serving as a savings’ tool.
c. Whole Life Plans involve payment of premiums throughout the life of the Insurer with the beneficiary receiving the coverage amount, interest and accumulated bonus upon the death of the Insurer.
d. Retirement/Pension Plans are savings plans which provide lump sum benefits or monthly income after retirement.
e. ULIPs (Unit Linked Insurance Plans) offer potentially higher returns in Life Insurance by investing in market-linked instruments
f. Children’s Plans provide savings and investment opportunities to fund higher education, weddings, etc.

Armed with this information, a detailed study of Insurance Providers, fine print, premium structures, etc. will enable you to choose the Policy that works best for you.

Items on Amazon Right Now for Tax Deduction Life Insurance:

Loopholes of the Rich: How the Rich Legally Make More Money and Pay Less Tax $2.69 In easy-to-follow and straightforward language, this guide teaches business owners how to pay only those taxes which are due to the government – and save the rest. By learning the rules that the wealthy play by, business owners can take advantage of legal tax deductions to cut their annual tax payments….

Tax Deduction For LTC Insurance Seen Likely.(Brief Article): An article from: National Underwriter Property & Casualty-Risk & Benefits Management $5.95 This digital document is an article from National Underwriter Property & Casualty-Risk & Benefits Management, published by The National Underwriter Company on May 15, 2000. The length of the article is 671 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…

IRS denies COLI deductions.(corporate-owned life insurance ): 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 December 1, 2002. The length of the article is 774 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…

Beacon Hill Roll Call

THE HOUSE AND SENATE There were no roll call votes in the House or Senate last week. Beacon Hill Roll Call this week examines the 2009 salaries and other benefits received by the Bay State’s 160 state representatives.

Personal Financial Planning Tips : How to Buy Life Insurance

Question: Gay charity?

Where I live, there is a store called Diversity Thrift. Basically they are like Goodwill or The Salvation Army in which you can make tax deductible donations of clothing, furniture, etc., and then those items are sold in their stores at very cheap prices. They advertise that their proceeds go to the benefit of the gay community. Not the poor gay community, or the sick gay community… just the gay community.

Am I the only one who sees something wrong with this? Would their be a problem if someone started a store like “Hetero Thrift… proceeds benefit the straight community”? I asked the owner of the store closest to me exactly how they disburse their proceeds, basically all he told me was that the money helps local area gays.

Answer: I quick search found the below information. If you give to a non profit and they don’t give you enough information then ask for more if they still don’t, then don’t donate, but the below info sounds good to me. I think there are many GLBT non-profit orgs that can benefit from something like this and I wish there was one like it near me. Also being a non-profit, I believe their financials are public record. I don’t see anything wrong with this at all unless only a small percentage goes to grants and awards. And it seems like they have given out a lot of money. How is this any different than the cancer society or a church or goodwill, except the grants and awards are made to help the GLBT community? :

Diversity Thrift Shop is the principal fund-raising organization of the Richmond Gay Community Foundation in Richmond, Virigina. The shop is located at 1407 Sherwood Avenue, Richmond, Virginia. Donations are accepted during regular shop hours or by calling ahead at 804-353-8890. The manager of Diversity Thrift is Jon Klein.

The Richmond Gay Community Foundation (RGCF) is a 501(c)(3) non-profit corporation whose mission is to improve the lives of lesbian, gay, bisexual, and transgendered people through funding and education. Grants are awarded twice a year. RGCF opened Diversity Thrift on August 5, 2000. In its first 9 months of operation, RGCF awarded nearly $100,000 in grants to organizations benefiting the LGBT community. Grant application deadlines are April 30 and October 31 each year. Announcements of grants and awards are made within 45 days of the application deadlines.

A large display located at the front of Diversity Thrift informs patrons of the distribution of the grants and donations. The display is on a rainbow background, which is both a Diversity Thrift logo and a symbol of the gay community.

Funds are normally restricted to organizations based in Central Virginia. Exceptions are sometimes made. A grant was made to fund the Jim Ricketson Memorial Library and the Roanoke 7 following the Backstreet Bar shooting in Roanoke in 2001.

Diversity Thrift was founded by Jon Klein, MSW. Jon is also the founder and former executive director of both the Richmond Organization for Sexual Minority Youth (ROSMY) and the Richmond Street Outreach Project.
Community Grants and Awards
2003 Spring Grants

Equality Virginia Education Fund was awarded $9,500 to create an “Online Action Center.” This is an “online interactive grassroots networking and education tool that will dramatically change and improve the ability of EV and its members to effectively lobby Virginia legislators.”

Fan Free Clinic received $5,000 to partially fund the salary and benefits of a HIV/AIDS Case Manager.

Virginia Breast Cancer Foundation was given $5,000 for a Lesbian Outreach Project to educate the Richmond area lesbian community about lesbian health issues, especially breast cancer.

GLSEN-Richmond, a local chapter of the National Gay Lesbian and Straight Education Network, received $4,600 to support Gay/Straight Alliances in area schools.

Richmond Triangle Players was awarded $3,500 for capital improvements and renovations to its theatre space.

Transformation Retreats, which provides “a safe and hospitable place where individuals living with HIV/AIDS may gather for support, education and community,” received $2,400.

From this 6-month cycle, Diversity Thrift awarded $30,000 in grant money to organizations providing programs and services to benefit the LGBT community, bringing the total grant money awarded since August, 2000 to $248,608.

Building Fund

From profits generated over the past six months (11/1/02 – 4/30/03), Diversity Thrift designated $68,326 as seed money for a LGBT community center, bringing the total in this building fund to $98,326.

2003 Spring Awards

Over the past six months, $18,213 in awards were given, raising the total amount of donations given since August, 2000 to $50,109.

Compassionate Action for Animals
Fan Free Clinic
GLSEN
Maggie L. Walker Governor School Gay/Straight Alliance
Hillside Boys & Girls Club
Metropolitan Community Church
New Beginnings Christian Church
PFLAG, Richmond Invitational Bowling Tournament
Richmond Organization for Sexual Minority Youth Richmond
Queer Space Project
Soulforce
Transformation Retreats
VCU School of Social Work
Vegan Action

Items on Amazon Right Now for Tax Deductible Clothing:

TurboTax- ItsDeductible $14.99 …

It’s Deductible $19.99 …

MONEY For Your Used Clothing $25.00 “MONEY – For Your Used Clothing” provides the taxpayer with certified valuations for over 700 clothing and household items commonly donated to charity – and all in accordance with the New IRS guidelines. If you itemize your deductions on your annual income tax return, you will save hundreds of dollars by using this book! This book explains six simple steps for documenting donations and tells how t…

ItsDeductible Workbook for Tax Year 2005: The Blue Book for Donated Items $4.00 Every year, millions of Americans forfeit hundreds of dollars in legal tax savings simply because they underestimate the value of their charitable item donations. ItsDeductible, from the makers of TurboTax®, provides a simple solution to determining fair-market values. Updated annually, with assessments for over 1,000 categories, including jewelry, clothing, baby supplies, small appliances, exerc…

Saginaw Safe Haven House homeless shelter collecting clothing donations

Donations may be dropped off at the shelter, 621 S. Fayette, 10 a.m. to 6 p.m., Monday through Friday. Donors can also call (989) 921-7233 to schedule a drop-off time.

8th Annual Hopi Holiday Project