YEAR END TAX PLANNING AND PREPARATION FOR INDIVIDUALS ? Tax Tips for 2004 including new tax relief due to the Working Families Tax Relief Act of 2004
Now is the best time to start thinking about your year end tax planning. These tax strategies can be put into effect by the end of the year and some as late as when the tax return is due. Planning now will save you money and reduce your tax liability not only with your IRS taxes but also with your state taxes. Here are tax tips that will help you accomplish your goal. MINIMIZE YOUR CAPITAL GAINSReview your capital gains and losses for the year including taxable investment accounts and taxable real estate sales.
If you have net capital gains, you may want to sell some of your investments that have a loss to offset the gain. You should also check your 2003 tax return for any loss carry forwards to 2004.NEW SALES TAX DEDUCTIONNew in 2004 taxpayers who itemize deductions can now choose between claiming the state income tax or sales tax as a deduction. The IRS will provide optional tables for use in determining this sales tax deduction if tax payers don't keep their receipts throughout the year. Sales tax paid on motor vehicles and boats may be added to the table amount up to the general sales tax rate.EDUCATOR'S DEDUCTIONRenewed for 2004 and 2005, eligible educators are permitted an "above-the-line" deduction up to $250 per year for non-reimbursed expenses incurred in connection with books, supplies, computer equipment and supplementary materials used in the classroom.COMBAT PAYDue to the Working Families Tax Relief Act of 2004 military personnel receiving combat pay can get larger tax credits in 2004. The new law counts excludable combat pay as income when figuring the Child Tax Credit.
The taxpayer also has the option of including or excluding combat pay when figuring the Earned Income Tax Credit. As always, combat pay is excluded from taxable income.OPEN AN INDIVIDUAL RETIREMENT PLAN ACCOUNT (IRA) See http://www.dgoodmancpa.com/smallbusinessretirementplan.htm#INDPLAN for an example of what you can do to defer income until retirement. You can open your 2004 IRA as late as April 15th of 2005. You may want to consider a Roth IRA. They are not tax deductible but also are not taxable when withdrawn at retirement.GET ORGANIZEDClients always ask me what I need in order to do their taxes.
For 90% of the population, with a little organization, your tax preparation doesn't have to be overwhelming. First, when you get those tax documents in the mail, have a folder ready to just drop it in there and forget about it until tax time. Most tax documents are required to be mailed by January 31st so you should have almost everything by the first week of February. If not, call to have them send a duplicate. Next, go through your check book, credit card statements and cash payouts for the basic deductible items.
This would include your medical expenses including eye glasses, taxes paid including vehicle registrations, donations and any employer expenses that were not reimbursed. Don't forget day care expenses, student loan interest and tuition if any of those apply to you.These are just some tax tips you should consider when thinking about your year end tax planning. If you have a specific question about your particular situation, e-mail me at dianne@dgoodmancpa.com and I will help you muddle through the tax planning issues you may have. This article was intended to provide general information about year end tax planning. It does not contain all the rules and exceptions that may apply to your situation.
If you have further questions regarding year end tax planning, I can be reached at www.dgoodmancpa.com.Coming Soon - E-mail me at dianne@dgoodmancpa.com and tell me what you would like to know more about. It just might be my next article!About the Author ?Specializes in servicing Small Businesses and Individuals. Visit www.dgoodmancpa.com for relevant and current information on a variety of financial and tax issues focusing on small businesses and individuals or call at 1-866-531-3035.CONTACT INFORMATION:Comprehensive Small Business Solutions, PC505 323-23071 866-531-3035 toll freehttp://www.dgoodmancpa.comYou have permission to reprint what you just read. Use it in your ezine, at your website or in your newsletter. The only requirement is to include the following footer...2004 Year End Tax Planning and Preparation for Individuals ? Tax Tips for 2004 by Dianne Goodman, visit http://www.dgoodmancpa.com for more content like this..
About the AuthorDianne Goodman, CPA ?Specializes in servicing Small Businesses and Individuals. Visit www.dgoodmancpa.com for relevant and current information on a variety of financial and tax issues focusing on small businesses and individuals or call at 1-866-531-3035.Offer in Compromise Program and JK Harris Help Family Gain New Start
NORTH CHARLESTON, SC (ContentDesk) October 27, 2004 -- Samuel Mathes had worked hard to build a successful business and a comfortable life for his family in Iowa until he found himself in the middle of a financial nightmare."Our world of financial success was turned upside down very quickly with a series of events we could not control," said Mathes.
"I saw an ad in the newspaper from JK Harris & Company ? ?they could help'.
I was always treated with respect, and my issues were handled promptly and professionally.
I always knew I had wise backing."Mathes' misfortune started when the Iowa Department of Natural Resources told him that his wastewater lagoon in Chariton, Iowa, did not meet standards and that he could build a new one at a cost of $600,000 or he could tie into the city sewer system.
He chose to tie into the Chariton system, but the cost was $350,000.Then his top customer substantially cut the mileage rate they were paying to Mathes' company,...
Tax help > Offer in Compromise Program and JK Harris Help Family Gain New Start
Six Ways Under Your Nose To Finance Your Home-Based Business
There are lots of ways to get additional capital to expand a home-based business. But before you look outside for financing, leaving the decision about your company's progress and merits to someone else, consider these six ways under your nose to finance your home-based business:Personal Savings Savings are easy to tap and involve no paperwork. The negatives: if you use the money in your business, it eats into your safety reserve and is no longer there for emergencies. It diverts funds from a very low risk investment to a high one. Whole-Life InsuranceWhole life policies accumulate tax-deferred cash value that you can tap for your business.
But the only way you can tap this cash without paying taxes is to borrow against your policy. As long as you keep your policy intact and pay premiums when due, loans remain tax-free.The negatives: you will be converting a low risk investment into a high one; if you decide to terminate your policy or if you default on repaying your loan, taxes...
Six Ways Under Your Nose To Finance Your Home-Based Business
Tax help > Six Ways Under Your Nose To Finance Your Home-Based Business
As a Bookseller Don't Risk Being Accused of Cheating on Your Taxes
Copyright (c) 2006 Michael Mould
Many online booksellers are of the opinion that their selling of books online falls under the heading of a hobby and they are not obligated to report the federal or state income from their bookselling endeavors, and while I am not a tax consultant or a tax lawyer, I believe many of them are grossly mistaken in their interpretation.
If you are selling books regularly through one of the online marketplaces and realizing a real profit from these sales, you are operating a business and you are required to pay an income tax on your profits.
If you are selling your own collection of books, you may still be obligated to pay an income tax on the sales if what you are selling them for exceeds what you paid for them or if you depreciated them previously.
I have read several places recently that the IRS has been looking into the online sellers of all kinds of products with a particularly keen interest in sellers having...
Tax help > As a Bookseller Don't Risk Being Accused of Cheating on Your Taxes
Five Smart Ways to Spend Your Tax Refund
The Internal Revenue Service (IRS) estimates that the average refund for this year will be close to $2,000. This has many Americans across the country struggling with the decision of whether to buy a vacation package to the Caribbean or to utilize the extra income towards something more useful. If you are one of the millions of people caught in the middle of such a debate, CreditGUARD of America has five smart ways on how to put that income tax return to good use.Pay Off High Interest Credit Card DebtIn 2004, an average household owed close to $10,000 in credit card debt, yielding interest charges of more than $1,000 per year. For instance, if you decided to pay $400 a month on such a balance with an interest rate of 16.5 percent, it would take you more than two and a half years to pay off the debt completely. This also means that you will have to pay more than $2,100 in interest charges alone.
When paying off your credit cards, keep in mind to pay off those cards with the highest...
Five Smart Ways to Spend Your Tax Refund
Tax help > Five Smart Ways to Spend Your Tax Refund
Devise Your Tax-Saving Strategy Free Before The End Of The Year
Cedar Rapids, IA (ContentDesk) October 14, 2005 -- 2nd Story Software?, Inc., developers of Americas most trusted value-priced tax preparation software, announces the release of its latest TaxACT? Preview software and, for the second year, TaxACT Online Preview an intelligent environment designed to help taxpayers simplify the complexities of devising an effective tax-savings strategy.
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Available today, consumers can log on to TaxACT.com where they can choose the platform that best suits their needs: TaxACT Online (over-the-Web) or TaxACT software (a download file that installs to their hard drive).
Both platforms enable their users to perform an end-of-the-year checkup, thus, helping to minimize the amount paid into taxes and maximize personal savings.
This innovative and powerful tax planning service provides an easy-to-use interview format that helps taxpayers conduct careful analysis of their tax situation.
Visitors need...
Tax help > Devise Your Tax-Saving Strategy Free Before The End Of The Year