Every year we say goodbye to certain things that we’ve come to know and love, and certain provisions of the tax law are not excluded from this treatment. Portions of the tax law are intentionally added with short life-spans, and others are retired from time to time as their intended use has either changed or been eliminated. Listed below are the tax provisions (according to the Joint Committee on Taxation) that will be expiring at the end of the year – some we’ll be glad to see go, others we’ll wish would stay around a while. Some will be extended by Congress, either at the last moment or on into the new year, as has happened in the past. Note: This article is aimed toward individual taxpayers rather than businesses, so I’ve only listed those provisions that will have impact on individuals. There are quite a few provisions expiring that […]
tax credits
Avoid the Freshman 15
It’s that time of year again when students either embark on a new journey from high school to college or return to undergrad studies from their freshman, sophomore, or junior summer into a new year of college. It’s also the time when bad habits, if left unmonitored, can result in what’s called the Freshman 15 – debt and weight gain. Historically, the Freshman 15 meant that a student settled down in college and in the first few months gained weight due to poor eating habits, stress, and perhaps alcohol consumption after turning 21. Today, I’ve expanded the Freshman 15 to also mean 15% – of credit card debt. Like consuming food, consuming money and on credit can lead to bad habits and have negative consequences. I can remember when I was a freshman in college and the credit card offers came pouring in. What an amazing display of copywriting! It […]
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IRS Helps You Out When Your Boss Doesn’t Pay You Back For Expenses Related to Your Job
Employee Transfer (Photo credit: Wikipedia) When you have to pay for certain expenses in order to do your job, sometimes (if you’ve got a good employer!) your company will reimburse you for those expenses. On the other hand, sometimes they don’t reimburse you for those expenses. Did you know that you can deduct those expenses (to a certain extent) from your income when you file your tax return? And in some cases, when your employer reimburses you, you still need to fill out additional tax forms in order to keep from being taxed on the reimbursements. The IRS recently published their Tax Tip 2012-54, which details how to go about deducting these expenses, and what expenses are qualified for deduction. Below is the text of the Tax Tip in its entirety. Employee Business Expenses Some employees may be able to deduct certain work-related expenses. The following facts from the IRS […]
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Tax Credits That Can Increase Your Refund
The IRS recently issued their Tax Tip 2012-41, which lists out some of the tax credits that are refundable. Most tax credits are not refundable, meaning that if the amount of the credit is more than your tax for the year, the credit is limited only to the amount of your tax. For example, if you had tax payable of $1,500 and then had Education Credits, Energy Credits, and/or Foreign Tax Credits amounting to more than $1,500. Your credits will be limited to $1,500 since that’s your tax payable and the credits are not refundable. On the other hand, there are a few credits that are refundable, as listed below in the actual text from Tax Tip 2012-41. Four Tax Credits that Can Boost Your Refund A tax credit is a dollar-for-dollar reduction of taxes owed. Some tax credits are refundable meaning if you are eligible and claim one, you […]
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11 Facts About the Child Tax Credit (2011)
Image via Wikipedia The IRS recently issued their Tax Tip 2012-29, which provides some key points about the Child Tax Credit. Below is the text of the tip: The Child Tax Credit is available to eligible taxpayers with qualifying children under age 17. The IRS would like you to know these eleven facts about the Child Tax Credit. Amount With the Child Tax Credit, you may be able to reduce your federal income tax by up to $1,000 for each qualifying child under age 17. Qualification A qualifying child for this credit is someone who meets the qualifying criteria of seven tests: age, relationship, support, dependent, joint return, citizenship and residence. Age Test To qualify, a child must have been under age 17 – age 16 or younger – at the end of 2011. Relationship Test To claim a child for purposes of the Child Tax Credit, the child must […]
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Do You Need to File a Tax Return This Year?
Image via Wikipedia Have you ever wondered if it was actually necessary to file a tax return? Perhaps your income is relatively low, and so you wonder if it’s really required of you to file a return. Often it’s not entirely a case of a return being required, but rather it might be in your best interest to file a return in order to receive certain credits against your income. Recently the IRS issued their TAX TIP 2012-02 which goes over some of the things you need to be aware of when considering if it’s necessary or in your best interest to file a return. Portions of this TIP are listed below, with additional information added. Do I Need to File a Tax Return This Year? You are required to file a federal income tax return if your income is above a certain level, which varies depending on your filing […]
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Expanded Adoption Tax Credit
Image via Wikipedia Recently the IRS published their Summertime Tax Tip 2011-10, which lists out six facts about the expanded adoption tax credit. The credit is considered “expanded” due to the changes made by the Affordable Care Act of 2010, which increased the amount of the credit, while also making the credit refundable. Refundable credits are such that, even if your tax on your tax return is less than the credit, whatever amount of your credit surpasses the tax can be refunded to you (much like the Earned Income Tax credit). Six Expanded Adoption Credit Facts Here are the six facts that the IRS lists: The adoption tax credit, which is as much as $13,170, offsets qualified adoption expenses making adoption possible for some families who could not otherwise afford it. Taxpayers who adopt a child in 2010 or 2011 may qualify if you adopted or attempted to adopt a […]
Sterling Raskie, MSFS, CFP®, ChFC®
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And if you’ve come here to learn about queuing waterfowl, I apologize for the confusion. You may want to discuss your question with Lester, my loyal watchduck and self-proclaimed “advisor’s advisor”.