The IRS Deductions Blog

Archive for December, 2009

Question: is there a tax deduction if u sell your house at a loss?

Answer: If the house is used for a personal residence and has no business function, there’s no deduction. To the IRS, it’s just like selling your personal car for a loss.

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Call to scrap ‘crazy’ tax breaks

The Government has a chance to lift the economy in 2010 with big changes on “crazy” tax breaks for investment property, according to NZX chief executive Mark Weldon.

Face Accountants TV – Capital Loss while Living Overseas & Tax Deduction on Interest Charged By ATO

Question: Filing Taxes — 1099 Misc — Home Daycare?????

I started a home daycare in April of 2007, I am licensed by the state. I just received a 1099-MISC form, how do I file?
I am married, my husband making the majority of the income, I usually do our taxes myself, but I have never dealt with a 1099-misc before.
I was reading other questions on here and saw that someone wrote that self employed people should pay their taxes quarterly???
And does anyone know what kind of deductions you can use when filing taxes for a daycare???

Answer: I also run a home daycare. The best idea is to invest in Turbo Tax deluxe. All you do is enter the information, what part of your house you use, meals, transportation, all of the deductions are laid out. Also, you can enter you 1099 information and it will do all the calculations for you.

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‘Mr. New Year 1971’s’ mother has fond memories 39 years later

Thirty-nine years ago on Jan. 1, 1971, the New Year baby arrived at 3:14 a.m. screaming his entry into the world at Framingham Union Hospital. He weighed in at 10 pounds and was 22 inches long. The nurses claimed he looked like a 3-month-old baby. We called him Little Guy for lack of a better name.

New Dependent Rules

If you own your home and you find yourself in financial difficulty someday, and urgently require a sum of cash in order to get yourself out of trouble, then there the option of taking out a second Colorado home loan is always open to you. This is not a choice you should make lightly, however, as taking a second Colorado mortgage loan can leave you extremely exposed financially, and vulnerable to possible accidents or disasters that might befall you when you least expect them.

This does not mean that you should discount the option of taking a second Colorado home loan entirely, only that you should be very careful about taking out such a loan. You need to be very sure that you have exhausted all other options before you resort to this one, as this is definitely an option of last-resort. If you are serious about getting a second Colorado mortgage loan, then the following are some things that you need to pay attention to when you take out the loan.

The very first thing you need to do before you even approach your local bank about obtaining a second Colorado home loan is to calculate the remaining payments on your first mortgage loan, calculate the total amount of your savings, factor in your income, and calculate exactly how large a second Colorado mortgage loan you can afford to ask the bank for. Doing this will ensure that you only take out a second mortgage loan that you can comfortably afford, so that you will not find yourself in even greater financial trouble even if something untoward happens to you.

Do not jump at the very first mortgage rate a bank or mortgage lender offers you. You need to do the necessary research to find out more about the mortgage market. Details such as the prevailing interest rates and generally accepted mortgage criteria and conditions are important when you actually attempt to obtain your second Colorado mortgage loan.

You also need to make sure that you have a very good reason for taking out a second mortgage. The added strain that this will put on your financial resources and the greater risk that you put yourself at are the price that you pay for taking out a second mortgage. This is not a small price to pay, so you should only pay it if you stand to lose much more by not taking out the loan. Trivial matters such as not being able to afford the latest model of car or a more luxurious home do not qualify as good reasons for you to take out a second mortgage loan.

Some good reasons that might justify taking out a second home loan are funding your child’s college education, paying off a credit card bill that is about to rollover, or making necessary renovations and repairs to your first home. All of these reasons make the added risk of a second home loan worthwhile, and whatever happens, you will most probably not regret your decisions to take out a second loan.

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In the Service

Air Force Airman Matthew J. Martin graduated from basic military training at Lackland Air Force Base, San Antonio, Texas.

President Obama reconsiders Tax Deductions for mortgage interest and charities

Question: From a tax perspective is it better to buy a prius now or in 2006?

I’m not to clear on the advantages of tax credit vs deductions which I understand is the difference between having a Prius delivered in 05 and 06.

Answer: I have read that it is better to buy one in 2006, but there are a maximum number of cars per make and model that will receive the credit. Too late for me as I already bought mine.

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Tax Tips: How to Save Money by Going Green

Consumers who make energy efficient upgrades may qualify for federal credits and deductions

Question: Is membership dues at a private social club tax deductible?

I’ve been invited to join an exclusive social club. I think it would be extremely helpful for my job. The members at this club are area business people. My job is to solicit donations from area businesses for a not for profit agency. The members at this club are the people I am trying to solicit donations from. So since I’d be using the membership for work would it count as a business related expense?
I have no clue about business related deductions, except for the 50% meals/entertainment and equipment. Therefore, I have no idea if this is a qualifying business expense.
Please advise.
Thank you.

Answer: The dues and fees to join are not deductible. However, if you schedule a business meeting at the club, your transportation expenses would be deductible. The cost of meals and entertainment (such as greens fees) would be deductible.

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Fundraisers cooked up to restore Milford Diner

MILFORD — Six years of abandonment and neglect, not to mention grease and grime, need to be cleaned up before the iconic Milford Diner can resume its life as a downtown landmark.

Part II of III: CRA Bullet Proofing