Saturday, February 28, 2009

"Bunching" of itemized deductions to save $$'s on your federal taxes

If you find that you are always on the cusp of the standard deduction/itemized deduction limit each year, you should work to “bunch” your deductions every other year in order to try and minimize your tax liability every other year. In the off year, you can simply claim the standard deduction since you are entitled to that amount regardless of what your deductible expenses are for that year. The most common and significant itemized deductions are home mortgage interest, property taxes, state and local income taxes, medical expenses, unreimbursed job-related expenses. charitable deductions and casualty losses.

While you don't have much control over the timing of your mortgage interest payments, you do have some control over the timing of property taxes on your personal (and a second) residence since you are typically billed by your County for property taxes in December that are not due until January. Pay this bill a few weeks early and you could push your itemized deductions over your standard deduction amount for that year. While we're talking property taxes, don't forget that even if you cannot push your total itemized deductions over your standard deduction, starting with your 2008 tax return (and recently expanded through 2009), you can deduct up to $500 (single/married filing separately/head of household) or $1,000 (married filing jointly) in property taxes paid on your main or second home over your standard deduction.

The other deduction that you have some control over is the medical deduction since you do have some control over the actual payment of these types of expenses. Unfortunately, it is very difficult to get over the 7.5% of adjusted gross income threshold that you would need to meet to deduct any of these expenses.

In short, taking advantage of additional tax deductions every other year is certainly better than never realizing the savings at all!

For more free tax tips, please visit TaxSmarty's Online Tax Guide.

Monday, February 23, 2009

What is the deal with efiling?

efile My Taxes. What Happens?

efiling is excellent. No forms to print. No W2’s to attach. Not stamps to buy plus you usually will electronically have your refund deposited in your personal checking or savings account within 7-11 business days. It sure beats waiting until the cow come home for your refund. It is all about you and your money.

How do I know the IRS accepted my efile?

Within two business days of filing your income taxes online, you will receive an email with information about your federal tax return and if it was accepted or rejected by the IRS. If you don’t get an email, you can go back to your online software or if you are using Tax Smarty.com online software you will get instructions there on what to do.

What if my efile is rejected?

If your efile is rejected – no need to panic and jump out the window. The IRS will provide you with information as to why you were rejected. It is usually a small error like incorrect social security number, birth date not matching your name. Also double check your bank information. An incorrect checking account number can trigger a reject file. We don’t want that. We want our money. If you cannot figure out the correction a helpful IRS customer service representative
(yes, I said helpful and IRS in one sentence) can get you on track. You can contact the IRS at 1-800-829-1040.

So you can Go Green and get your refund faster with efile. Using an online tax prep service like TaxSmarty.com only makes your tax life easier.

Saturday, February 14, 2009

Tax provisions of the recently passed federal stimulus plan

Are you asking "how does the recenlty passed stimulus bill affect me personally right now?". If so, please check out this great summary of the tax provisions of the new "American Recovery and Investment Act of 2009" from our partners at CCH, Inc. Please click here to read this summary on how the new provisions can/will affect your tax situation, whether from a personal or business perspective.

It remains to be seen if these provisions along with some of the other "stimulus" provisions of this bill positively affect our national economy to any great degree since many government programs such as these tend to deliver much less than advertised, but we at TaxSmarty are always in favor of giving back dollars to the american people through tax cuts of some kind (preferably the simpler the better and more immediate than not!).

Tuesday, February 10, 2009

TaxSmarty's Tax Tip and Discussion Blog

Welcome to TaxSmarty's Tax Tips and Discussion Blog! Our goal to to provide income tax help to the "folks" so that you can minimize your tax burden and take advantage of every opportunity you have to keep more of what you earn. We will be blogging about various tips and strategies that you can use to legally minimize the income tax you pay to the federal government as well as your state and local government where applicable. We plan to make entries to our blog on a weekly basis during tax season and also plan to continue blogging throughout the remainder of the year. Before we get started with our initial blog entry, a little bit about our firm:

TaxSmarty provides an easy, accurate, secure and inexpensive way to complete your federal and state tax returns and efile those returns with the IRS and State taxing authorities using our CompleteTax system. Taxes have never been this easy!
We offer a plethora of free income tax information and planning resources on our website in addition to professional review of self-prepared income tax returns as well as a full-service preparation of income tax returns for reasonable fees. You can reach us on the web at www.taxsmarty.com or via email at info@taxsmarty.com

Markus & Rispoli Accounting, PLL is the professional services firm who owns and operates TaxSmarty. We provide quality and personal tax preparation and planning for individuals and small businesses along with accounting services such as write-up/bookkeeping, Quickbooks set-up and support, business systems evaluation and consulting, among other services. Markus & Rispoli Accounting has been providing quality and personal tax and accounting services to our clients since 1996. We are registered with the Accountancy Board of Ohio as a registered public accounting firm and our managing partner, Greg Markus, is a licensed CPA in the State of Ohio. We are committed to uncompromising business ethics and corporate social responsibility.
Tax Tip of the Week: Completing and updating your W-4 federal income tax withholding certificate to maximize your take-home pay.

Tip of the Week: Adjusting your federal W-4 to increase your take-home pay

In order to maximize your take-home pay, you should make sure that you claim all of the personal exemptions that you are entitled to on your W-4 Federal Income Tax Withholding Certificate. Many people unknowingly claim “0” or “1” when they are entitled to claim several more exemptions for their spouse, dependent children or other dependents and exemptions related to itemized deductions that a person is entitled to (e.g. mortgage interest and points, property taxes, state and local income taxes). After all, if you are receiving a large refund from the IRS or your State government, you have really just provided each of these entities with an interest-free loan. Just think – you could have used the extra money throughout the year to pay down your mortgage, credit card balances, pay cash for a large purchase or simply have earned some interest income from placing these additional funds into a savings account or CD. The W-4 form contains instructions on how to correctly calculate all of your withholdings that you are entitled to claim. This concept should also be applied to your state equivalent of the W-4 form if your state has an income tax withholding requirement.