The IRS Deductions Blog

Posts Tagged ‘business’

Question: Is your healthy insurance premium tax deductible? Is it better to do a group plan or individual plans?

I have a small company with three employees – is it better we get a group health insurance plan or all get individual plans? what are the tax benefits? I was told you can deduct more of the premiums if you are a company rather than an individual?

Answer: I have been a tax accountant for 27 years. I do not have enough information to give you a reliable answer to your question. However, you should look into a relatively new tax development called the HRA or HSA. Your bank should be able to provide you with information as to how these plans work. They are very flexible and work only when people purchase high-Deductible Health plans. The HRA or HSA accounts are used to pay out-of-pocket medical expenses (but not the insurance premiums) such as your deductible or co-pays under the plan. They are like IRA accounts for your health. I like them a lot. Please don’t be a fool; consult a tax professional. You are in a very complicated area of tax law.

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Question: A question about tax-deductible donations?

I’m interested in tax-deductable donations. I used to think that you could just reduce the amount you donated from your taxes due. (For instance, if I donated $50 to a charity, and I owed $500 in taxes that year, my tax bill would be reduced to $450). But from what I’m reading now, it looks like your donation is subtracted from your adjusted gross income. That lowers your income for the year, and so lowers your tax rate. But this doesn’t work out nearly as beneficial as I thought. As a rough estimate, it looks like a $100 dollar donation would lower my bracket to the point where I would only save about $20 on my taxes. Do I have it right?

Answer: That is correct. Donations are not taken out of your tax liablility directly. They are deducted from your income. This gives you an “Adjusted Gross Income” which is then taxed appropriately based on the amount and your filing status.

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Question: Are HOA fees tax deductible? Can you write them off, in my case they pay my property taxes.?

Are HOA fees tax deductible?

My HOA’s are $1,100 a month and cover my property taxes and all utilities. Is a portion of that tax deductible?

Also, if I’m only renting out one room in my house, does it qualify as a rental property? Does that make a portion of my HOA’s tax deductible?

Thanks for your time.

Answer: I’ve never heard of an HOA covering property taxes before, but….

Mortgage interest and property taxes are deductible IF you itemize deductions.

Renting out one room of the house makes most expenses (partially) deductible, to the extent of gross rental income. If the tenant doesn’t have a separate entrance, and you’re living in the house, you probably are forbidden from claiming a loss on Schedule E, and otherwise Deductible Expenses are counted first, so the proportionate share of your mortgage interest and property taxes must be claimed on Schedule E rather than Schedule A.

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Every Landlord’s Tax Deduction Guide $18.93 The only book on tax deductions specifically for residential landlords! Named a “Top 10 Real Estate Book” by Robert Bruss, syndicated real estate columnist If you own rental property, you should be taking advantage of the many tax write-offs available. Every Landlord’s Tax Deduction Guide gives residential landlords the plain-English guide they need to save money on taxes — without the ser…

Every Nonprofit’s Tax Guide: How to Keep Your Tax Exempt Status and Avoid IRS Problems $14.99 There are roughly 1.4 million 501 (c) (3) organizations operating in the U.S. And, according to recent data, the nonprofit sector is growing, with the number of registered public charities having jumped over 30% between May 2000 and May 2006. All of these nonprofits enjoy special privileges not available to other organizations but not without a price each must comply with a set of special rules an…

Tax Deductions for Professionals $34.99 The only “know how” guide for professionals who want to reduce their tax burden. If you’re ready to hold on to more of your hard-earned money, turn to Tax Deductions for Professionals. Comprehensive, easy to read and filled with interesting examples, the book is organized into practical categories featuring common deductions, including: -start-up and operating expenses -health deductions -…

Tax Deduction Tips for Businesses : Filing Cash Based Accounting for Taxes

Question: Is it better to refinance a mortgage for a tax deduction or continue with my 15 year mortgage?

I have 10 1/2 years left on a 15. Single, retired and no dependents.Pension(60,000) Does it make sense to refinance?

Answer: Interest rates dropped to around 6.10% for a 30 year loan. What is your interest rate. Will you save money by refinancing? Your mortgage does not account for much of a deduction. You may want to stay the course.

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TurboTax Basic Federal + e-File 2010 – [Old Version] $4.99 TurboTax Basic was designed to make doing your simple taxes easy, by guiding you step by step through your federal tax return. TurboTax guarantees its calculations are 100% accurate, or you’ll be paid any IRS penalties plus interest. TurboTax also double checks your return to help you get the deductions and credits you deserve. Everything you need to easily do your simple tax return. Does th…

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J.K. Lasser’s 1001 Deductions and Tax Breaks 2012: Your Complete Guide to Everything Deductible $9.98 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…

Tax savings Home Based Business – Business Use Percentage BUP