More Ways to Save through Life’s Transitions

In my prior blog post on “12 Ways to Save on Taxes Through Life’s Transitions“, I gave you 12 tips on education, working and family life. This blog post continues with 11 more tax tips to help you save through life’s major events.

Divorce

1.  Before your divorce is final, copy all business tax returns for your spouse’s corporation or partnership. The IRS will not give you copies of your spouse’s business returns if you did not sign them.

2.  Consider the tax implications of paying support. Child support is not deductible, but alimony is deductible to the payer and taxable to the recipient. If it’s rolled together into “family support” it is fully taxable to the recipient and deductible to the payer, just like alimony.   Follow the 5Ds for alimony deductibility. To be deductible, alimony must be paid in dollars, under a decree or written agreement, and cease on your ex’s death. After the divorce, you must maintain your distance (you can’t live with your ex), and the payments can’t be designated as non-taxable or child support.

3.  Keep a calendar of the days (and nights) your child spends at your house and at your ex-spouse’s. This will provide documentation for the courts and for the IRS (for dependency exemptions and head of household filing status).

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Business Ownership

4.  Shift income to your child’s lower tax bracket by paying your children reasonable wages to help you with age-appropriate jobs in your business.  A child may be able to earn up to $6,200 in 2014 without paying federal income taxes.

5.  Deduct the health insurance premiums you pay for your entire family. If you employ your spouse in your business, you may deduct the premium as an employee benefit.

6.  Deduct an office in your home, if you regularly and exclusively use part of your home to perform administrative or managerial activities for your business. You may be able to deduct a portion of utilities, rent or mortgage interest, depreciation, cleaning, and the like.

7.  Read more. Subscriptions, books, and other materials related to your field are tax-deductible items. Ditto conferences, seminars, and courses related to your work.

Home Ownership and Investing

8.  Own your own home. Mortgage interest and property tax deductions will save you money on your taxes, and saving to buy a home is a wonderful use for your money after you have contributed the maximum to tax-advantaged retirement plans.

Paycheck Tax Calculator 2014

9.  Deduct points paid on your home loan. Points paid when you acquire your home are deductible in that year, and points paid to refinance a loan must be written off over the length of the loan (1/30 each year on a 30 year loan). When you refinance again, you can write off the remaining unamortized points.  When you sit down to do your taxes make sure you have records of points paid.  We will ask simple questions about your home loan and accurately calculate your your tax deductions.

10.  Contribute to your IRA early in the year so your money has longer to grow. Although you have until April 15 of the following year to contribute, your money will have 15-1/2 more months to grow if you contribute on January 1 of the previous year.

State Tax Preparation 2014

11.  Deduct personal bad debts. If your best friend borrows money and then skips town, you may be able to deduct this non-business bad debt as a short-term capital loss on your tax return up to $3,000.

4 Tax Tips for New Filers

I remember the first time I did my taxes – I was so nervous. I was afraid that if I filled out something wrong, I’d get a call from the IRS and a huge penalty. It didn’t help that I tried to do it by hand.

It’s almost like a rite of passage – preparing your own taxes. You may have filed your taxes for a summer job as a teenager, but your parents probably helped (if they were nice).

Now that you’re all grown up, here are four tips that can help you as you start out as a new tax filer:

Ohio State Tax Extension Forms

1.  Get Organized

One of the best things you can do is get organized.

Gather the forms that your employer and other financial institutions send you like your W-2 and 1099s. Your employer, lenders, and others will send you forms that have bearing on your tax situation. Keep all of these forms organized in a single place as you get them in. You should also keep relevant receipts and other documentation that can back you up if you are claiming tax deductions and credits.

The more organized you are, the easier it is to find what you’re looking for.

E File 2014 IRS Tax Forms

2.  See If You Qualify to File for Free

Many first time tax filers qualify for free federal tax filing.  If you just have a W-2 and a little bank interest you can file your federal taxes quickly and accurately for free.  We will ask you simple questions about your life and in a few steps you will be able to file your taxes and receive your biggest tax refund.

3.  Don’t Forget State Taxes

It’s easy to get caught up in federal taxes and forget that you have to file a state tax return. Don’t forget that you will need to file a state tax return and federal tax return unless you live in a state without state taxes. We will automatically transfers all of your information from your federal tax return and prepares your state tax return for you after you answer simple questions about your life over the past year.

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4.  File Online

It’s easy to prepare your own tax return online.  I would recommend using tax software because something that simple is often free.  This kind of do-it-yourself help can be a good way to get a solid grasp of your tax situation plus you can e-file with direct deposit for your fastest tax refund.

The Advantages of Using Tax Software to Prepare Your Taxes

It’s a new year and with it comes tax season.  The good news is you can use tax software to easily prepare your taxes.

There are several advantages of using our website, so if you’re on the fence please take look at the list below.

Easy to Use

I want tax software to be extremely easy to use and follow. Good tax software makes you feel as if you’re answering friendly questions about yourself. I feel like we get the job done right answering simple questions and verifying the information.

Tax software like us also helps you avoid duplicating work. For example, here we easily transferred our information from our federal tax return to our state’s tax return.  It might not see like such a big deal, but being able to eliminate inputting information again saves time and allows for accuracy.

2014 Tax Refund Estimator

Learn More About Taxes

Yes, I do consider learning about taxes as a plus. What tax software can do is show how the current tax credits and deductions affect you.

When we bought the house in 2010, I saw how that increased our tax refund I learned about itemizing our deductions versus taking the standard deduction. We also learned about the tax deductions and credits we were able to take related to having our new baby.

Becoming more knowledgeable about your own taxes is empowering and easy with us.  You can answer simple questions about you and your life and accurately file your taxes and get your biggest tax refund.

Have a Question? Get Some Help

2014 Tax Return Calculator

If I’m filing taxes using software, I expect to have some kind of safety net. I’ve used our website for a few years now and one of my favorites is their Live Community or what’s now called the Answer X change. Over the years they’ve answered a vast amount of questions people have about their taxes.

In addition there are tax experts who are CPAs and enrolled agents available to answer your questions. That’s a huge relief for me as we file our taxes. We want to be honest and we want to take advantage of every legal opportunity to lower tax liability.

Thoughts on Tax Software

New Jersey State Tax Extension

I feel very comfortable using tax software to file our taxes. How about you? If you used tax software before, what are some of your thoughts? How are you filing your taxes this year? Why did you choose that option?  Are you expecting a tax refund or do you owe taxes?

5 Common Tax Forms You Should Expect in the Mail

Tax season is in full swing.  Time to get your tax forms and receipts in order so you can get closer to your tax refund.  But if you’re new to filing taxes you may be wondering what tax forms you should be on the lookout for.

Tax Extension

Here are 5 of the most common forms to look for so you can prepare your taxes:

    W-2: You will receive a W-2 if you earned income working for an employer.   This form shows how much income you earned for the year and how much was deducted for taxes and any other withholding.

    1099: If you worked as a contractor or did work on the side you may receive a 1099.  There are also other versions of the 1099 form for interest earnings, dividend earnings, and other sources of income that you need to report.

    1098: If you own a home and have been paying mortgage interest, you will receive this form from your lender that shows the amount of mortgage interest you paid and can deduct.  It may also show property taxes you paid as well any points paid, which are both deductible.

    1098-E: Details your tax deductible student loan interest payments paid over $600.  If you paid less than $600 you may not receive a 1098-E, but don’t forget your interest.  You can still deduct it.

Get Free Tax Calculator 2014

    1098-T:  Details tax deductible eligible education costs you paid for higher education.

There are also other pieces of supporting documents you won’t receive in the mail that you should have in front of you when you sit down to do your taxes.  Don’t forget:

    Supporting information for tax deductions and credits: If you are eligible for tax deductions and credits, you will need to get information from supporting documents. Whether it’s information needed to claim child care or job search expenses, you will need to refer to related documents.

    Social Security numbers for family members: In order to file your taxes, you need your social security number. You also need the correct social security numbers for your spouse, as well as for anyone you are claiming as a dependent.  If you had a baby last year make sure you have a social security number for your baby.  You will need the social security number in order to take valuable tax deductions and credits.

    Contribution information: Don’t forget information about retirement plan contributions that may be deductible.  Also, if your state offers you a tax benefit for contributing to a 529 plan, you’ll want that for your state taxes (it doesn’t apply for your federal taxes).

1040 Tax Calculator 2014

    Charitable Donations:  If you donated to charity you need proper receipts to fill out information when preparing your tax return.  You don’t have to include these receipts with your tax return, but you need to keep them for your records to prove your donations or other expenses

Information of Income Tax Refund Online

Tax Refund 2013 2014 Online E File Free Taxes 2014 

How to File Taxes for Years Missed

How to File Taxes for Years Missed from Scott Wright

How to Get Medical Expense Tax Deductions

Medical expenses

Even for those with good health insurance, can add up over the course of a year. U.S. Federal tax law allows you to deduct certain medical operating expense to lower your tax bill. Learn the situation for how to get medical expenditure tax deductions and how to deduct some not-so-obvious medical expenses.

Instructions

Missouri Tax Extension Forms

1.       Calculate any medical expenses above 7.5 percent of your (AGI) adjusted gross income. For instance, if you’re (AGI) adjusted gross income is $50,000, you can only subtract medical expenses in excess of $3,750.

2.        Add up all medical expenses based on your receipts and canceled checks.

3.       Include all medical miles driven. These include miles driven to doctor's appointments, therapists, a pharmacy or medical conferences for any medical research studies you may be in. Multiple the number of miles by the current standard medical mileage rate to arrive at the deductible dollar amount.

4.       Add up the receipts and medical mileage total. Subtract 7.5 percent of your AGI from this amount to figure your medical expense assumption.

5.       Measure up to whether your tax rate is lower by taking the standard exemption or by itemized deduction.

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