The IRS Deductions Blog

Archive for the ‘Itemized Deductions’ Category

Question: If you use the standard deduction when doing your taxes, can you deduct your mortgage interest also?

I have heard that you can only deduct your mortgage interest if you itemize your deductions, but am not sure if that is correct.

Answer: You have a choice of itemizing, or taking the standard deduction. You can only deduct your mortgage interest if you itemize, since it’s an allowable itemized deduction. So yes, what you heard was correct.

Items on Amazon Right Now for Itemized Deductions Mortgage Interest:

Q&A: Gerald Parsky

The editorial board of The San Diego Union-Tribune recently interviewed Rancho Santa Fe businessman Gerald Parsky, chairman of the Commission on the 21st Century Economy, a bi-partisan group appointed by Gov. Arnold Schwarzenegger to make recommendations on restructuring California’s tax system. Below is an edited transcript of than interview.

Question: New Land-Grab by the CBO?

The Congressional budget office has these formerly no-go-zones (for decades) on their docket.
Clamp a 15% cap on the value of all Itemized Deductions.
The mortgage interest deduction
Local property tax write-offs
Charitable deductions
Medical expenses
casualty losses
Just guess how much real estate this endangers, and what group this is aimed directly at?
Add a two year freeze on Social Security and you got it Pilgrim.
No middle class tax increases? Only the evaporation of middle class Tax Deductions.
How subtle.
I’m surprised it’s not trash collection. Nothing gets people to notice faster than swimming in their own waste.
Using scare tactics of lessening police & fire is sorry enough, but dangling kids futures as their guilt WMD is just low.
As you say Levon, there is an almost unlimited area that can and should be cut first.
Immigration perhaps? and all those freebies.

Answer: The government is too big. If the government needs x amount of money to fund this monstrosity, then the government is going to take x amount of our money to do it. Directly or indirectly. Anything they say is irrelevant. It’s all about how much money is needed to run what is there.

Items on Amazon Right Now for Itemized Deduction Cap:

ATR: Obama Health Plan Is a Net Tax Hike of $629 Billion

Many of the Tax Hikes Fall on Families Making Less Than $250,000

Reaper and the Tax Man (Nothin for shizzle)

Company registration requirements and procedures vary across different countries. This article provides a summary of the company formation requirements in Singapore versus Indonesia including minimum statutory requirements, foreign ownership policy, incorporation procedure and time-line, compliances etc.

FOREIGN OWNERSHIP
Singapore does not impose any restrictions on foreigners who wish to do business in the country. It allows 100% foreign ownership (i.e. shareholding) of a Singapore private limited company. In other words, foreign entrepreneurs do not need a local partner to register a private limited company in Singapore. The company can engage in any lawful business activity.
In Indonesia, the foreign entrepreneurs can set up a foreign direct investment company with 100% ownership but with the following restrictions:
* The business activities are restricted to only those that are open to foreign investment.
* Within 15 years from the commencement of commercial operations, the foreign shareholder is required to divest at least 5% of the shares to an Indonesian citizen or legal entity.

MINIMUM INCORPORATION REQUIREMENTS
In Singapore, the minimum incorporation requirements include: a local registered address; at least 1 local resident director (a Singapore Citizen, a Singapore PR, or a foreigner holding a valid work visa or Dependent Pass); a local resident and qualified company secretary (must be a natural person); a minimum of 1 and maximum of 50 shareholders (natural persons or corporates); and a minimum paid up capital of SGD 1.00 (no authorized capital required).
Foreigners who wish to register a company in Indonesia must comply with the following requirements: a local registered address; at least 1 director (need not be a local resident); minimum of 2 and maximum of 50 shareholders (natural persons or corporates) and a commissioner. Although there is no mandatory minimum share capital requirement, authorities normally approve companies with a minimum share capital of USD 100,000 – USD 250,000.

INCORPORATION PROCEDURE
Company registration in Singapore is fully-computerized and can be completed within 1 day via electronic means. There are only two major steps involved in company formation – name approval and filing incorporation documents.
By contrast, company incorporation in Indonesia is tedious, time consuming and can take up to 12 weeks to complete all formalities. You must submit a company incorporation application along with supporting documents to the Capital Investment Coordinating Board (BKPM). Application processing takes around 5 weeks, upon which the BKPM will issue an in-principle business license valid for 3 years.

INCORPORATION TIMELINE
Company incorporation in Singapore can be completed in a record time of less than 24 hours, with minimal formalities. In Indonesia, it can take anywhere between 3-6 months to incorporate a company.

ANNUAL FILING REQUIREMENTS
In Singapore, an Annual Return must be filed with Companies Registrar and Income Tax Return with the Singapore tax department each year. In minimize the administrative burden on small companies; they are exempt from filing audited accounts.
In Indonesia, companies must submit Annual Return along with audited annual accounts to the Companies Registry. Income Tax Return along with audited accounts must be filed with the Indonesian tax authority each year.

CORPORATE TAXES
In Indonesia, according to the latest tax amendments, the corporate tax rate has been reduced to a flat corporate tax rate of 28% for 2009 and will be further reduced to 25% from 2010. Dividends paid to individuals, interest, rents and royalties are subject to 15% withholding tax.
Taxes in Singapore are significantly lower than Indonesia. Singapore charges a corporate tax rate of approximately 8.5% for profits up to S$300K and a flat 17% for profits above S$300K. There is no dividend tax in Singapore.

ON A FINAL NOTE
Setting up a company in Singapore is significantly easier than incorporating a company in Indonesia. Unlike Indonesia, Singapore does not impose any restrictions on foreign ownership nor does it limit the business activities that are open to foreign investment. Most entrepreneurs prefer Singapore as an investment destination, as Singapore company registration can be completed in 1 day’s time with minimal formalities. Given Indonesia’s 3-6 month time line for company incorporation, which is hampered by bureaucratic delays and the complicated visa approval process, investors usually rank Indonesia as an undesirable offshore business destination.

Items on Amazon Right Now for Alternative Minimum Tax Itemized Deductions:

Up for taxing task

It’s your move: Year-end tax moves can improve your position for the coming tax season and upcoming year. They’re especially important because some steps must be taken before the year runs out.

Diet: South beach diet

South beach diet plan is a famous diet designed by the well known cardiologist Arthur and diet expert Marie. It provides an effective alternative to the low fat diets approaches. Before this diet was designed, the low fat diet approaches like Pritikin diet etc were very famous. When the diet was first designed, it was designed to help the heart patients and was not known for the purposes that it is known for these days. In the present times, it is considered as a very good approach to reduce the weight. You will not have to consume the other diets which are low in fats to reduce the weight. This diet provides and excellent alternative.

The South Beach diet was developed as Dr. Arthur believed that sticking to the low fat diet is very difficult. He believed that the low fat diet is good for reducing the cardio vascular problems by reducing the cholesterol, but he also knew the fact that these diets are hard to continue with. He then discovered during his scientific research that the low fat diet actually is responsible for increased level of insulin. This means that it will increase the weight with time and hence the cardio vascular problems would remain as they were. This led him to the design of his own diet plan which is now known as South Beach Diet.

The south beach diet is simple to understand. What it does is that it replaces certain kind of fats with other fats. The fats which are replaced are known as bad fats. They are replaced by good fats. The same thing is done with the carbs. The trans fats and the saturated fats are considered bad fats. These bad fats result in increasing chances of heart disease by increasing the cholesterol levels.

The south beach diet is divided into three phases. Each phase has different food items included and a different goal is meant to achieve. The very first phase is the most difficult phase which lasts for two weeks. In this phase, you will have to cut down all the sugar intakes and you will have to eat no fruits and no processed carbohydrates. This cycle results in weight loss and the hunger cycle is refreshed.

The phase two is the easy phase. In this phase the dieter is allowed to use more fruits and some of the vegetables which were earlier forbidden are now allowed. This phase has no defined time limit and the dieter has to continue it till the time he reaches his desired weight.

The third phase is a life long phase. The dieter needs to know the good food and the bad food and he will have to stick to that without having to stay away from certain food types. Actually nothing is forbidden in this phase.

Luka Bozic

Items on Amazon Right Now for Agi Itemized Deduction Phase Out:

Jean Chatzky: Unemployment and taxes … getting your due

We’ve turned the corner into tax season, and if you were one of the many people who spent much of 2009 collecting unemployment, you may think this year is going to be a snap. Unfortunately, it’s not that easy.

Question: Can someone need help with a real estate tax question?

So, I paid my home’s 2008 real estate tax bill in January 2009. Can I claim the real estate taxes I paid in my Itemized Deductions for tax year 2008?

Answer: No, you can only claim it in the year that you paid it. If you pay your 2009 taxes before Dec 31, 2009 you can claim both 2008 and 2009 next year.

Items on Amazon Right Now for Itemized Deductions 2008:

For-profit health care

The dilemma seems to be whether to look at health care as a commodity to be traded in the market or as a human right to be guaranteed and protected by our government.