Tax News & Articles

Tax Free Investments
By Seth Miller

Tax-free investments are the investments that are exempted from tax. Generally, there are two types of tax-free investments namely fixed and variable. In the case of a fixed investment the investor is assured with the guarantee of return of the original sum on maturity. Sometimes the income is kept as a fixed amount. In a variable investment, the value of the amount varies according to the fortunes and marketability of the underlying shares in a particular plan.

There are quite a lot of tax-free investments available today. It can be categorized into two - one that is offered to everyone and the other that is available to people having income under their personal allowance. These investments are absolutely free from income tax as well as capital gains tax. Moreover, the tax-free investment provider normally does not suffer any tax on the funds. There are some investments that contain the advantages of inheritance tax (IHT).

Tax-free investment is the best way for a person who is on the look out for ways to generate current income without increasing tax liability. It can also play an active role in any comprehensive financial plan. But, most people have a doubt in their mind about the amount that needs to be invested. There is no need to invest a lump sum amount in tax-free investments. These investments allow regular savings to be made thus making it easy for all.

Though there are not many disadvantages for tax-free investments, there are some considerations that are to be kept in mind before making these investments. One is that most of these investments have a minimum period for maturity in order to gain full return. If early encashment is done it may result in loss of tax-free status. Before making an investment decision, study in detail the terms and conditions of the investment plan.

Investments provides detailed information on Investments, Real Estate Investments, Bank Trust Investments, Stock Investments and more. Investments is affiliated with How To Invest Money.

Article Source: http://EzineArticles.com/?expert=Seth_Miller
http://EzineArticles.com/?Tax-Free-Investments&id=408444

Labels: investment, tax, taxfree

Posted by BizWizard at 9:03 AM | Permalink | Comments

Tax Free Investments
By Seth Miller

Tax-free investments are the investments that are exempted from tax. Generally, there are two types of tax-free investments namely fixed and variable. In the case of a fixed investment the investor is assured with the guarantee of return of the original sum on maturity. Sometimes the income is kept as a fixed amount. In a variable investment, the value of the amount varies according to the fortunes and marketability of the underlying shares in a particular plan.

There are quite a lot of tax-free investments available today. It can be categorized into two - one that is offered to everyone and the other that is available to people having income under their personal allowance. These investments are absolutely free from income tax as well as capital gains tax. Moreover, the tax-free investment provider normally does not suffer any tax on the funds. There are some investments that contain the advantages of inheritance tax (IHT).

Tax-free investment is the best way for a person who is on the look out for ways to generate current income without increasing tax liability. It can also play an active role in any comprehensive financial plan. But, most people have a doubt in their mind about the amount that needs to be invested. There is no need to invest a lump sum amount in tax-free investments. These investments allow regular savings to be made thus making it easy for all.

Though there are not many disadvantages for tax-free investments, there are some considerations that are to be kept in mind before making these investments. One is that most of these investments have a minimum period for maturity in order to gain full return. If early encashment is done it may result in loss of tax-free status. Before making an investment decision, study in detail the terms and conditions of the investment plan.

Investments provides detailed information on Investments, Real Estate Investments, Bank Trust Investments, Stock Investments and more. Investments is affiliated with How To Invest Money.

Article Source: http://EzineArticles.com/?expert=Seth_Miller
http://EzineArticles.com/?Tax-Free-Investments&id=408444

Labels: investment, tax, taxfree

Posted by BizWizard at 9:03 AM | Permalink | Comments

Daycare Depreciation: Buy the Best Toys and Educational Equipment and Gain Taxable Benefits

By Jan Verhoeff

Do you run an in house daycare? Those children deserve the best. Give it to them and deduct the benefits.

Toys and Educational Equipment used for Daycare are Depreciable as assets, so provide the best equipment and enjoy the benefits of Tax Deductions for your Assets.

Whether your Daycare spends time outside or inside, the playground equipment, computers, games, and equipment purchased provide entertainment and education. Long Term Use items are depreciable for any business, and your business is no different.

Some daycares offer a special room and equipment for naptime, playtime, or learning, and those rooms are outfitted with special equipment that does cost money. Keep your receipts and document your schedules to use this equipment on the Depreciation Schedules.

Some specific equipment that has been deducted for daycare:

Playground equipment - indoor and outdoor.
Computers - for internet planning use, or for child use.
Children’s computers for games and learning.
Educational Toys & Peripheral equipment.
Nap time necessities - blankets, rugs, mats, etc.
Books, shelving, and cozy kid chairs.
Tables and Chairs for children.
Laundry equipment used for daycare.
Daycare safety equipment (car seats, high chairs, playpens)
Plastic serving dishes
Dishwasher
Video & Stereo Equipment - Music & Videos.
Fencing for yards
Storage Shed
Yard Care Equipment
Vacuum Cleaners & Cleaning equipment

IF you run a daycare and purchase anything specifically for use in the daycare, keep your receipts and document use of the equipment.

A daily activities diary helps keep track of activities and deductions. (Another use for that computer in the den?)

If you blog your daycare activities, or manage a forum for daycare providers, you may be creating another stream of income and another source of deductions for your home business.

Jan Verhoeff enjoys additional Spring Income from operating a Tax Consulting Business from her home in Southeastern Colorado. IF you’re looking for information, need help with online filing, or just want to discuss your tax prep with a professional, Jan offers hourly consulting fees at reasonable rates. Or you may search http://taxprep101.blogspot.com for Tax Advice and Information at no cost to you.

If you choose to develop your business with additional income streams, Jan Verhoeff can help. Visit http://brandyourmarket.com for more information about business development and branding your market.

Posted by BizWizard at 10:30 AM | Permalink | Comments

Depreciation: Residual Tax Deductions - Break the TAX Code for Profit

By Jan Verhoeff

Bolster your returns for Tax Profit using the Depreciation Schedule to Maximum Benefit for your Business.

As a home based business, your deductions may be limited by ‘red flag awareness’ but the bottom line is, those deductions were written to be used by the common man to prevent overpayment of Taxable Income, while Maximizing Business Benefit to the Small Business. Nobody wants to set off an Audit by abusing the system. However, the system is designed to protect the Tax Payer while providing Income for the Nation. So use it for that purpose and maximize your business benefits.

Business Equipment

Every business requires some basic equipment to operate. A home based business requires several fixtures, and these are deductible. A few operatives within this circle might include:

Computer & Peripherals - printer, scanner, and any other equipment necessary for operating your business.
Fax Machine - this might include the installation of another phone line.
Telephones - your land line in the kitchen, might not be enough to keep up with your business.
A desk - for operating your business.
A comfortable - ergonomically correct chair to ease the strain on your back from hours of working.
File cabinets, supplies, and filing equipment.
Archival storage systems.
Coffee pot & Conference equipment - this may include an overhead projector, or other equipment that you use for meetings, either in your office or elsewhere.
Many other various pieces of equipment may be included here.

Transportation

If your everyday vehicle is a mom-van that hauls children from place to place, and your business requires that you transport clients, business associates, and/or materials from point A to point B on a regular basis. Your business may require a different form of transportation. If you purchase a vehicle specifically for your business, this vehicle becomes a depreciable asset to the company.

Your Business Commute requires hopping over the mountains frequently? How about a plane to save the miles on the family car, and having your associates meet you at the airport? The airplane is deductible. Take flight lessons or hire a pilot. His wages become deductible and your time is freed up to work and earn more during the flight.

What other income producing equipment do you have that might be deductible?

Home improvements that make your home more presentable for business would be deductible, in the percentage of the improvement that is specifically used for business. Any improvements specifically in your home office are completely deductible. New carpet, new paint, new draperies, decorate for maximum effectiveness and make your home office profitable with depreciable value.

If you have a Daycare at home, you have a whole other list of deductibles that can be depreciated over time, and we’ll get to that in another article.

Jan Verhoeff enjoys additional Spring Income from operating a Tax Consulting Business from her home in Southeastern Colorado. IF you’re looking for information, need help with online filing, or just want to discuss your tax prep with a professional, Jan offers hourly consulting fees at reasonable rates. Or you may search http://taxprep101.blogspot.com for Tax Advice and Information at no cost to you.

Posted by BizWizard at 10:29 AM | Permalink | Comments

"Joy is what you experience when you do something for someone else, someone who cannot reciprocate your kindness." ~ Zig Ziglar

For more of this story, and inspiration please visit Zig's Breakfast Moment.

Posted by BizWizard at 5:48 AM | Permalink | Comments

IRS Is Focusing on Schedule C Filers
By Earnest Young

In the last few tax years IRS has been paying more attention to taxpayers who file a schedule C. These taxpayers are basically those who operate small, incorporated businesses.

According to Mark Everson, the IRS commissioner, the increase focus will be on those individuals who are filing 1040s and are operating businesses that are not incorporated. He Said, "the biggest portion (of unpaid tax) is in underreporting of income by individuals. Typically, that's individuals who are filing Schedule C."

Evidence has shown that some of these IRS audits can be pretty in depth in respect to reviewing bank records, computer files, and receipts. It is believed that Schedule C filers are more likely than the average taxpayers to overstate expenses and understate income. In many cases Schedule C filers claim personal expense, such as gas mileage, as business expense and the IRS is very much aware of these underpaid taxes. However, taxpayers are better off having expense on a Schedule C than having it on a Schedule A as an itemized deduction.

One reason why it is prudent for small business owners to prepare for a tax audit is the question of Social Security taxes. New business owners must remember that essentially the net income that they are going to report on the Schedule C is going to be treated as self-employment income and subject to the self-employment tax, says, Mel Schwarz of Grant Thornton. It is possible that you will be subjected to Social Security tax on the first $94,200 of wages in 2006 or $97,500 in 2007.

In view of this focus by the IRS, Schedule C filers should try to keep a good record of business income and expense receipts and prepare their documents in the case of an audit. If you are claiming deduction on items such as office supplies, organize you records regarding that purchase. In the case of a vehicle used for business purposes, keep an updated log including the dates the mileage was incurred and the destination driven.

The IRS will focus on issues such a whether an equipment or supply should be classified as a personal expense or business expense depending on what it is used for and for what percent of the time. To qualify for the deduction one has to use the item for at list 50 percent of the time. For example, a computer that is used 55 percent of the time for personal reasons cannot be claimed on Section 179 to write off the cost of that asset. Section 179 is a tax rule that permits companies to deduct up to $108,000 for the cost of assets that are used in their business which was bought during the tax year. It is important to note that not all assets are covered under Section 179. Real estate, for instance, can not be covered. Section 179 is geared towards small businesses and is used in the place of having to maintain depreciation records.

Small business owners have a host of options that they can select in minimizing their tax liability and increasing their tax return. They can purchase office equipment and supplies, computer, and other business expenses before the end of the year. It is recommended that all business expense get paid prior to year end for them to be deductible. 100 percent of certain business expenses can be written off in the first year. In addition, in the case of a vehicle, you are limited to a first-year depreciation of $3060. However, you can deduct up to $25,000 for some SUVs.

Defer billing customers and postponing income until early January or to bill clients so late in December that you would not be in receipt of income until January is a common way of reducing your income for the year, thus reducing your adjusted gross income (AGI). Before small business owners attempt to take advantage of tax deductions it is recommended that they consult a tax/accounting professional.

Earnest Young is an accounting and tax writer for http://accentaccounting.net

Article Source: http://EzineArticles.com/?expert=Earnest_Young
http://EzineArticles.com/?IRS-Is-Focusing-on-Schedule-C-Filers&id=392684

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Take Time to Trim a Few Bucks of Your Taxes
By Earnest Young

It’s prudent taxpayers to plan ahead for credits and deductions

Thanks to the 2006 federal tax credit many people are able to buy their dream car. This credit applies to a variety of hybrid vehicles, but unfortunately it begins to phase out after the manufacturer sells more than 60,000 vehicles. After that the credit shrinks, and then it just phase-out. Research shows that hybrid owners can save up to $40 of gas cost a week.

Among taking such measures like making charitable donations, contributing to 529 college savings and 401(k) plans, and pruning the stock portfolio, buying a hybrid car is another way taxpayers can take before the end of the year to reduce their tax bills come April. “Just because you aren’t rich doesn’t mean it’s not worth it to sit down to see what you’ve done during the year, and to see what you can still do to save yourself some money,” said Harris Abrams, ‘RIA tax analyst with Thomson Tax & Accounting.

December is a good time to calculate your likely tax liability for 2006 and come up with an estimate for 2007, too. Once you are finished with your 2006 estimates, consider whether your income and deductions are likely to change in the coming year. Here are some other steps to help you reduce your April tax bill.

Make charitable donations:

You will have to keep records of what you donate, and according to Internal Revenue Service, the items have to be in good condition.

Spend flexible spending accounts:

Now is the time to use the funds in your flexible spending accounts or lose them.

Prune portfolio:

If you find yourself with more capital gains than you anticipated, see whether you have any losing investments you can sell.

Donate to 529 plan:

If you have opened a 529 plan and are married, you can deduct up to $10,000. If you are a student, you can deduct up to $5,000. For more information, see nysaves.org.

Contribute more to 401(k) plan:

Employees can sock away up to $15.000 ($20,000 if they are 50 or older) to a 401(k). If you have a little cash left over, consider increasing your contribution this month.

Prepay mortgage as well as state and local taxes:

Consider prepaying your mortgage, state income taxes or local property taxes so you can add to your deductions for 2006.

Pay spring semester tuition:

Those planning to take classes in the spring should consider paying their tuition this month and claiming the Lifetime Learning credit.

Adjust withholdings:

If you’ve estimated your tax liability and found it much different from what you’ve paid, you may want to change your withholding.

Taking these steps now can make a big difference on April 15, experts said. According to Earnest Young of Accent Accounting and Taxes "when you get to April it is too late to do any planning."

Accent Accounting & Taxes: (http://accentaccounting.net) Accounting for small businesses and individual tax

Article Source: http://EzineArticles.com/?expert=Earnest_Young
http://EzineArticles.com/?Take-Time-to-Trim-a-Few-Bucks-of-Your-Taxes&id=391499

Posted by BizWizard at 9:59 PM | Permalink | Comments