The IRS Deductions Blog

Archive for June, 2011

Items on Amazon Right Now for Correlation Between Deductible And Premium:

7 Ways To Reduce Teen Auto Insurance Cost Without Dropping Coverage

Question: Overpayment of Income Taxes for Tax Year 2004?

Dear All,

In prior years, I have been doing taxes using just the 1040 booklet and calculate all the numbers on my own. This year, I bought a software and to much of my surprised, I actually should have itemize my deductions vs. taking the standard deductions. This saved me about $500 in taxes.

I realized that I had overpaid 2004 taxes because I used standard deductions, rather than itemize my deductions. Can I amend my 2004 tax returns and use itemize deductions so I can get some refund back for both Federal and State(CA)?

If so, which forms should i use?

Thanks

Kaya

Answer: Yes you have three years from when you file to amend your taxes. You would file a 1040X. You can probably find it on the website www.irs.gov or go to a local H&R Block and have them do a FREE double check challenge. They only charge you if they get you more money back or save you more money on your taxes. If you do it on your own, then the 1040X is what you would file.

Items on Amazon Right Now for Standard Deduction Vs Itemizing:

IRS write offs

Question: For High Mileage Older Cars with low value is it ok to drop your Comprehensive & Collision deductible?

I’m looking over auto insurance quotes and can’t seem to figure out why I should justify a $500.00 deductible on a car that’s valued at $900ish for trade.

Answer: Absolutely. I recommend just carrying liability.

Items on Amazon Right Now for Car Insurance Collision Deductible:

Rental Car Insurance: Is It Worth the Price?

When vacationers rent cars this summer for their adventures, they’ll have to decide: Do they want the insurance the company is offering. It might be tempting to it pass up the extra fees, but whether or not you should is something you should figure out long before you get to the counter.

Moreno Auto Body & Collision, Car Repair, Car Rental

Question: When a company loses a case, is that amount pre-tax or post-tax?

I was reading about HP’s $14.5 million settlement today and it got me curious.

When a company loses a case or settles, is this money coming from pre-tax revenue (and hence, would be a tax deductible cost)? Or is it coming from post-tax profit?

Do any of the following factors affect the answer?
- It’s a settlement vs loss/guilty?
- Paid to the government (as a fine) vs paid to another company/individual?
- Punitive damages vs compensatory damages.

A related question I have is, for example, whether a traffic ticket given to a driver working for a company at the time of the ticket is a “cost” that can be written off by the company?

Answer: Pre-tax.

Items on Amazon Right Now for Deductible Settlement Costs:

$4.8 million insurance settlement ‘fair’ but not nearly enough to fix Taunton City Hall

Nothing, it seems, is simple when it comes to calculating how much it costs to repair a 100-plus-year-old municipal building damaged by fire, smoke and water.

Credit & Debt Consolidation : Ways to Reduce Debt

Question: Are business expenses deductible if paid for with personal money?

My boyfriend and I recently started up a small home business, and being that tax season is coming we were wondering on something.

1. What percent of a tax preparer’s and accountant’s fees are tax deductible for our business?

2. The tricky part- my boyfriend (he is the business owner) would be paying for these expenses with his own personal money, not money profited from the business. Does this matter?
We are a C-Corporation as well.

Answer: Congratulations, you are a partnership.

1. All partnership income is reported first on the form 1065, then on your individual tax returns. You report all professional fees on this form.

2. The business expenses paid with personal funds are accounted for depending on your written partnership agreement. If that agreement say you pay for items yourself, you deduct them on schedule E. If that agreement doesn’t (or there isn’t one), then it’s considered to be paid by the partnership (with corresponding funds adding to capital) and reported ont he 1065.

Items on Amazon Right Now for Not Deductible:

SquareTrade 3-Year Appliances Warranty ($75-100) $13.99 SquareTrade Care Plans are great value and cost 70% lower on average than traditional warranties.  Upon purchase, you will get an email confirmation.  You will not be mailed a paper contract.  If you have questions, please call: 1.877.WARRANTY….

SquareTrade 3-Year Appliances Warranty (Below $50) $7.99 SquareTrade Care Plans are great value and cost 70% lower on average than traditional warranties.  Upon purchase, you will get an email confirmation.  You will not be mailed a paper contract.  If you have questions, please call: 1.877.WARRANTY….

SquareTrade 3-Year Fitness Equipment Warranty ($600-800 Items) $89.50 SquareTrade Care Plans are great value and cost 70% lower on average than traditional warranties.  Upon purchase, you will get an email confirmation.  You will not be mailed a paper contract.  If you have questions, please call: 1.877.WARRANTY….

SquareTrade 3-Year Fitness Equipment Warranty ($2000-$3000 Items) SquareTrade Care Plans are great value and cost 70% lower on average than traditional warranties.  Upon purchase, you will get an email confirmation.  You will not be mailed a paper contract.  If you have questions, please call: 1.877.WARRANTY….

IRS Helping Ease the Pain at the Pump

You can write off more the second half of the year for each mile you drive for business, moving or medical purposes.

Homeless Giveaway #3 Part 1 Austin Atheists Helping the Homeless