The IRS Deductions Blog

Archive for October, 2009

Question: Can you help me figure out my tax liability for 2006?

I am self-employed. I made $13,138.39 last year. How much should I have paid to the government for federal income tax, social security tax and medicare tax? I am married with a child and have deductions and credits, but I am curious about how much I owe before this is taken into consideration.

Answer: go to H&R block website, they have a tax calculator to help you with an estimate.

Items on Amazon Right Now for Income Tax Deductions For Self Employed:

Only a few days left to save on your taxes

Decisions this week can affect your 2009 bill. Here are tips on taking available credits, deductions Unemployment checks are partially excluded

Tax Tips & Information : About Self-Employed Federal Income Tax Deductions

Question: Would the following items be tax-deductible for an Avon business?

1. Fashion magazines, so I can keep up the latest make-up. Would these be considered “trade magazines”?
2. Ear-piercing, so I can demo earrings. Would this be considered a business expense?

Answer: Dear M: You will be filing Sch. C as a Sole Proprietor. The best thing you can do is keep track of your meetings and log every mile for business keep these in a very professional binder as the IRS may want to review these in an audit. If you dedicate a part of your home and use it exclusively for business you can write off a percentage of your utilities, insurance, rent/mortgage etc. Also keep track of all your supplies as you will have an inventory calculation and cost of goods sold on Sch. C. Trade magazines would be OK demo ear rings OK Ear-piercing is probably not going to cut it. This year the mileage deduction was 50.5cents/mile 1st half of the year and 58.5 cents last half of year. Next year the tentative number is 55 cents/mile. Could change if gas prices vary wildly.

This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provide. Click on my profile to read more.
Errol Quinn Enrolled Agent Master Tax Advisor

Items on Amazon Right Now for Tax Mileage Deduction 2009:

AARP volunteers prep for tax season

For many the only financial records of concern for now are those Christmas bills coming due. But some have already received tax information in the mail so AARP is gearing up to help straighten out all those 1040 forms.

Getting the Most From the Mileage Tax Deduction & Write Off for 2009, 2010.mov

Question: deductions for capital losses in the stock market?

As everyone is aware 2008 was a bad year in the stock market. We lost after sales well over $10,000. I am told that only $3,000 would be deductible. Had I made money in excess of $3,000 would it have been taxed? And further is it true that I can only claim the $3,000 deduction?

Answer: Almost true. Capital losses are NOT limited to only $3,000 a year. First, capital losses offset capital gains regardless of amount, dollar for dollar. Then, to the extent your losses exceed your gains, or absent any gains, you can deduct an ADDITIONAL $3,000 against ordinary income.

Example. Suppose you had $10,000 in recognized losses in 2008, and no capital gains. You would be limited to deducting $3,000 against your ordinary income, and carry-forward a $7,000 loss. The following year you owned a mutual fund that paid a $5,000 capital gain. You would be able to use your entire $7,000 loss carry-forward; $5,000 to offset the gain, and an additional $2,000 against ordinary income.

Hope that helps.

Disclaimer. The foregoing response is for general purposes only, and shall not be construed as specific tax, legal, or investment advice for any individual. Please consult with your professional advisors to find out which strategies are best suited for you.

Items on Amazon Right Now for Stock Losses Deductible:

German Economy On Brink Of Radical Restructuring

The German economy coped astonishingly well with the global crisis in 2009. But in 2010 it will need to lay the foundations for a radical restructuring if it wants to cope with chronic overcapacity in its aging industries and fend off powerful new competitors from China and India.

About Certified Pre-Loved Volkswagens

Question: Rental property – is mortgage interest tax deductible?

I own two properties : a condo that I live in, and a condo in another state that I rent out.

Answer: You can deduct all mortgage interest, but on different schedules.

Mortgage interest on your home goes on Schedule A.

Mortgage interest on your rental condo goes on Schedule E. If you show a loss on Schedule E for the rental unit, you may be able to deduct that loss as long as your income is below the threshold for passive losses ($100,000) or you have passive gains to offset the passive losses.

Items on Amazon Right Now for Tax Deductible Mortgage:

10 Ways To Save Money On Your 2009 Tax Return

There are only three more days left in 2009, so is it too late to do anything that will help you save money when you file your tax return for this year?

Tax Deductible Mortages in Canada – Bello Mortgage

With the popularity of Flash quiz, more features and functions are added to quiz maker. Time limit is one important property of quiz settings. It enables users to set time for the entire test and also for the individual question, so that the test gets a strict time limitation and a good guarantee of the fairness in the process of taking a quiz.
Users can set time limit for the whole test; thus all the participants must finish the quiz in due time. If it is out of time, quiz takers can’t answer the question any more. Compared with this function, the time limit for each question seems to make the quiz more efficient in time control. People are also able to set different time limit for each question. Users can adopt this function in several situations like the following ones.
1. Avoid cheating.
Once the quiz publisher adds proper time limit to each question, the participants will get no extra time to cheat through searching internet or books for answers. Quiz participants would probably just get enough time to take the quiz by themselves, so the fairness can be comparatively well guaranteed.
2. Make strict time-limit questions.
Some tests require the strict time limit in parts of the questions such as the part called “Fast Reading” in language test. Thus it is necessary to set the time limit for each question in the quiz. Also because of the powerful time control, time limit can add more fun to quiz game. To save testing time, it is also necessary to set different time limit for the questions according to the level of difficulty.
There are various uses of the quiz with time limit for each question. To make this function well served, users need to pay attention to some details:
1. Set proper time limit.
Never set the time too short or too long. If it is too short, the quiz takers may not get enough time to answer the question and feel nervous; if too long, the setting of time limit for each question is meaningless at last. Before making the time limit, users are supposed to set the clear purpose of the quiz, evaluate the questions, and also know more about the basic feature of target participants.
2. Offer time limitation instruction clearly to participants.
The quiz with time limit for each question has the strict constraint on time. If the participants overlook or don’t know that, they may not finish the quiz in time, and it can result in a failure in test. Users can use the function called “blank page” to add the time limitation instruction for the quiz.
Quiz makers are easy to find in the market. There are online Webs and also the standalone software can help you to create quizzes, but few can support the time limit for each question well. The following quiz maker software are worth trying: QuizCreator and articulate QuizMaker.

Items on Amazon Right Now for Itemized Deduction Income Limitation:

The Challenge of Deducting Medical Expenses

Some married couples could boost their tax break by filing separate returns.

New Healthcare Taxes; Senate version – 10 years of taxing for 5 years of service – Glenn Beck